UPDATE 1-ETFs attract self-directed U.S. investors -Cogent

Tue Feb 16, 2010 4:06pm EST

(Recasts lead, adds demographics on ETF investors; Pimco)

NEW YORK Feb 16 (Reuters) - Exchange-traded funds are considered the new growth sector among U.S. households with investable assets of at least $100,000, and they are comfortable investing in ETFs without the help of an adviser, according to a study released on Tuesday.

Cogent Research found that nearly two-thirds of U.S. investors who own ETFs had purchased them with no help from an adviser.

ETFs globally breached the $1 trillion level for the first time in 2009. In the United States, assets in ETFs rose 46 percent during the year to $777 billion.

Cogent surveyed 4,000 Americans, of whom 11 percent own ETFs, up from 9 percent a year ago. ETF investors are typically younger than other investors, with an average age of 53 and investable assets of $1.1 million. Investors who do not buy into ETFs have an average age of 57 with investable assets of around $663,000, the research found.

Investable assets for the survey excluded real estate assets.

"Given the high engagement level of self-directed investors with ETFs, it's no wonder that providers are now focused on addressing the needs of this important audience," Christy White, Cogent Research co-founder, said in a release.

White said 40 percent of current self-directed ETF owners say they plan to increase their use of these products, compared to just 26 percent of advised ETF owners.

Self-directed ETF owners are twice as likely as their advised counterparts to be aware of major ETF providers, at 38 percent for self-directed and 18 percent for advised, Cogent said.

Among the major ETF providers, The Vanguard Group is perhaps "best positioned" to capitalize on the wave of opportunity among self-directed investors, Cogent said.

While awareness of the firm as an ETF provider is currently lower than that of iShares among self-directed investors, those who recognize Vanguard as an ETF provider view it much more favorably than those familiar with any other ETF provider, it added.

Furthermore, Vanguard garners significantly higher loyalty from its ETF customers than any other provider, Cogent said.

"Right now, Vanguard is sitting in the cat bird's seat when it comes to capturing market share among self-directed ETF investors," said John Meunier, Cogent research co-founder. "But with big players like Charles Schwab entering the space, and the recent announcement of a strategic distribution agreement between iShares and Fidelity, it's pretty obvious everybody wants a piece of the action."

Other ETF providers viewed favorably by at least four in 10 investors who know them are Claymore (45 percent), Pacific Investment Management Co. (43 percent), and PowerShares (41 percent).

Pacific Investment Management, or Pimco, is a "rookie" in the ETF market, but "its positive impressions as an ETF provider are in line with long established ETF brands PowerShares and Spiders/State Street," Cogent said. (Reporting by Jennifer Ablan, Editing by Leslie Adler)

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