Attracted by factors such as diversification benefits, individual investors in Singapore boasted the greatest percentage of exchange-traded fund users, according to a survey by State Street Global Advisors.

Six in ten individual investors in Singapore hold exchange-traded funds (ETF) in their portfolios, according to State Street Global Advisors’ (SSGA) «ETF Impact Survey». This surpasses the other markets surveyed including the US (45 percent), Australia (45 percent) and Japan (48 percent).

Diversification was cited as the top benefit of holding ETFs, followed by trading flexibility and lower costs. 82 percent of Singapore investors agreed that ETFs improved the overall performance of their portfolios with 78 percent claiming a positive impact on confidence. 

Generational Difference

Within the city-state, there are generational differences in ETF adoption. Millennial investors in Singapore have the highest utilization of ETFs at (67 percent), compared with Gen X (56 percent) and Boomers (48 percent). 

«With three-quarters of Millennials in Singapore saying they have recommended ETFs to other investors, younger investors see more reasons to use ETFs,» said Anna Paglia, chief business officer at SSGA. «However, for Boomers with ETFs, 88 percent agreed that ETFs have improved their overall investment performance and have more liquidity than other investment products, therefore they can respond more rapidly to market changes.» 

Positive Outlook

Singapore investors are also amongst the most optimistic about the economy and markets. 59 percent are optimistic about the city-state's economic outlook in the next 12 months, exceeding levels in the US (32 percent), Australia (30 percent) and Japan (26 percent). On markets, 55 percent of individual investors in Singapore believe the S&P 500 index will be higher this year compared to 17 percent who think it will be lower.

SSGA’s survey is based on individual investors in the US, Australia, Singapore, and Japan with investable assets of $250,000 or more. Within Singapore, this included 254 individual investors. The survey also covers financial advisors and institutional investors.