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ETF knowledge gap holds back 40.2% of non-investors

Current ETF investors favour self-directed channels at 87% adoption.

Lack of understanding is the top barrier to exchange-traded fund (ETF) investing, cited by 40.2% of non-ETF investors, according to a BlackRock study.

Some 31.6% flagged concerns over hidden fees, 29.7% found it difficult to choose ETFs, and 26.8% were concerned about potential market losses.

Other barriers included lower potential returns (17%), liquidity concerns (16.3%), a preference for single stocks (15.2%), tax concerns (12.1%), concerns over index tracking (12%), lack of recommendations from advisers (8.7%), and a preference for real estate (6.2%).

Singaporean adults are highly self-directed, with 49% using digital investment platforms, brokers, or their bank’s investment services.

Another 21% use advised services, whilst 12% use robo-advisers or managed portfolios.

Amongst current ETF investors, self-directed investing rises to 87%, whilst 34% use robo-advisers or managed portfolios and 24% use advised services.

“ETF adoption is increasingly shaped by what investors see, compare and experience within digital environments,” the report said. “Platform design, product discovery, education content, provider visibility and execution journeys can all influence investor decisions.”

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