Crypto ETFs ‘punching above weight’ as almost half of ETF investers plan buys

Nearly half of exchange-traded fund (ETF) investors are planning to buy a crypto ETF, matching those who said they’d buy a bond ETF, according to a report from brokerage giant Schwab Asset Management.

In its ETFs and Beyond report released on Thursday, Schwab found that 52% of respondents to its survey were planning to invest in US equities, while 45% said they were interested in crypto ETFs, tied in second place with US bonds

Bloomberg’s senior ETF analyst Eric Balchunas said in an X post on Thursday that the results were a surprise, given the sheer size of the bond market in comparison

“This was also shocking to see crypto tied with bonds for second place in where people plan to invest,” he said. “Majorly punching above weight given crypto is 1% of total ETF aum [assets under management] while bonds are 17%.”

Source: Eric BalchunasSchwab’s survey polled 2,000 individual investors aged between 25 and 75, with half having either bought or sold ETFs in the past two years, and with at least $25,000 of investable assets

Millennials show higher interest in crypto ETFs

The report found that Millennial investors, people born between 1981 to 1996 and aged between 29 and 44, showed a higher interest in crypto ETFs than other age brackets

Roughly 57% of Millennial respondents indicated they planned to invest in crypto through ETFs, compared to 41 % of Gen X, people born between 1965 and 1980.

Millennial investors showed a higher interest in crypto ETFs than other age brackets. Source: Schwab Asset ManagementBaby boomers, people born between 1946 and 1964, showed the least interest in crypto ETFs, with only 15% indicating they planned to invest

Balchunas said overall, the “whole survey was super-optimistic” for ETFs in general, with “basically everyone planning to increase usage,” especially the younger generations

Low cost and accessibility driving ETF adoption

Key drivers for ETF adoption were found to be low costs and accessibility, with 94% of respondents answering ETFs help keep costs down in their portfolios.

Related: US spot Bitcoin ETFs bleed over $2B in second-worst outflow streak ever

About half also strongly agreed ETFs allow them to invest in more niche or targeted strategies separate from their long-term portfolio and provide access to other types of asset classes.

David Botset, the managing director at Schwab Asset Management, said the “world of investing is undergoing a rapid transformation as individual investors gain access to new asset classes, investing strategies and vehicles.”

“ETF investors are at the forefront of this evolving landscape. They are using ETFs, which now outnumber individual stocks in the US, not only for low-cost core portfolio investments but also to explore the expanding universe of investment opportunities.”

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