Both mutual fund and ETF investors are feeling more optimistic in 2023 than last year
Canadian investors in mutual funds and ETFs have given their overwhelmingly positive view of investment products and the advisors they work with.
The latest annual Canadian Mutual Fund and Exchange-Traded Fund Investor Survey from IFIC and Pollara reveals high confidence, with nine in ten investors in both fund types saying that they are somewhat confident, confident, or completely confident in these investment products.
Despite the challenging economic times which began in 2022, the impacts are beginning to ease, although ETFs were less weakened than mutual funds. Despite the net redemptions seen for mutual funds this year, there is improvement. But 39% of both types of investor is investing less due to inflation.
The report found that responsible investing is becoming more understood among both groups of investors with 39% of mutual fund and 54% of ETF investors saying they are somewhat or very knowledgeable about RI compared to last year – an increase of 7% and 4%, respectively.
Advisor satisfaction and value
Advisors are doing well, with nine in ten of both mutual fund and ETF investors expressing satisfaction with their advisor, but there is no room for complacency.
Advisors also score highly for helping to encourage investors to have better savings and investment habits (77% of mutual fund investors and 71% of ETF investors said so), and for boosting confidence in reaching investment goals (85% for mutual and 80% for ETF).
However, while most mutual fund investors rely on an advisor, the report highlights a slight dip in 2023 with most of this cohort having done at least some self-directed investing, while two fifths feel they will make an investment purchase without an advisor in the next year.
The trend for ETFs is also for less use of advisors and these investors are more likely than the mutuals group to have made their last investment purchase without an advisor.
Investors are also less reliant on advisors for information about investments, especially those favouring ETFs. Mutual fund investors consider advisors their primary source of information but also use financial websites, search engines, and social media. ETF investors are more likely to use social media even though only one third are sure the information is coming from professionals.
“It is heartening to see that investors continue to place a great deal of confidence in advisors, especially during times of market volatility and uncertain economic conditions,” said Andy Mitchell, president and CEO of IFIC.
Annual statements
Investors expressed satisfaction with annual fee and performance statements.
Both sets of investors said they find them useful and important although half believe they contain all the fees they pay on their investments.
The vast majority of mutual fund and ETF investors prefer to receive all their investment statements electronically, citing easier management, reduced clutter, and lower environmental impact.
The full study is on the IFIC website.
