Study Finds Self-Directed Investors Are Defining the ETF Product Landscape

Heightened Awareness, Deeper Brand Loyalty, and Bigger Allocations Are the
Hallmarks of the Self-Directed ETF Investor
CAMBRIDGE, Mass.--(Business Wire)--
As the ETF industry ramps up for yet another year of significant growth, new
data from Cogent Research underscores the importance of the role self-directed
investors are playing in defining the ETF product landscape. According to a
national study of 4,000 affluent Americans, interest, usage and commitment to
ETFs is significantly higher among self-directed investors who manage their own
portfolios. The new study, ETF Investor Brandscape, looks at brand awareness,
product usage, provider loyalty, and customer experience across major ETF
providers.

"This is the first deep dive in the ETF category among the affluent and high-net
investor population," said John Meunier, Cogent Founder and Principal. "We think
it sheds important light on this emerging product category, and dispels some
entrenched beliefs about who is using these products."

For example:

* Self-directed investors` awareness of several top ETF providers is almost
twice that of advised investors.

* While equal proportions of self-directed and advised investors use ETFs,
self-directed investors allocate 20% more of their portfolio to ETFs (i.e., 17%
average allocation to ETFs among self-directed vs. 14.1% average allocation to
ETFs among advised).
* Among current ETF owners, self-directed investors are far more loyal to their
primary ETF provider than are investors who purchase and own their investments
through an advisor.
* Usage of ETFs is expected to increase significantly in 2009 among current
owners and non-owners alike. On average, one out of every four (25%) current ETF
owners plans to increase their ETF holdings. Among self-directed investors, the
proportion of likely increased use rises to 35%, representing a 40% higher
increased adoption rate.
* iShares and Vanguard are fighting for the number one spot in overall customer
experience, which will payoff in loyalty and increased investments. Meanwhile,
PowerShares, State Street Global Advisors, and ProShares must work harder to
inspire existing clients to increase investments. Furthermore, challenger brands
like WisdomTree and Rydex need to focus on the basics-increasing investor
awareness of their offerings.

"Everything we see in the data suggests that there is real `home-grown` passion
among investors-both advised and self-directed-for ETFs," says Christy White,
Founder and Principal of Cogent Research. "At the end of the day," she adds,
"providers that are committed to promoting and supporting a dual distribution
strategy will prevail in this growing marketplace."

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Cogent Research
Kelli Grimes, 617-715-7612
kgrimes@cogentresearch.com

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