Exchange-Traded Funds (ETFs) have gained popularity among investors, including occupational pension insurers. Talouselämä recently inquired about pension insurers’ opinions on ETFs and their investment strategies. While companies like Ilmarinen and Varma utilize listed equity funds significantly, Veritas has not yet disclosed its investment information. For example, Ello’s stock ETFs make up a significant portion of their stock fund investments.
Direct equity investments are preferred by pension insurers like Ilmarinen and Varma due to cost-effectiveness and the ability to align with sustainability goals. They only use funds when investing in direct stocks is not cost-effective. On the other hand, Varma’s Director of Investments, Markus Aho, emphasizes the benefits of ETFs for cost-effective and liquid global equity investments.
Ilmarinen’s stock strategist, Juha Venäläinen, highlights the advantages of ETFs for affordable exposure to stock indices while unlisted funds allow for more expertise-driven investments. Overall, pension insurers see ETFs as a valuable part of their investment strategies, offering liquidity and cost-effectiveness.
While ETFs provide numerous benefits, pension insurers like Ilmarinen and Varma also make direct equity investments to leverage the expertise of portfolio managers. They carefully consider the balance between direct and fund investments to maximize returns and manage costs effectively. In conclusion, ETFs have become a central part of pension insurers’ investment portfolios, offering diversification, liquidity, and cost-effectiveness while acknowledging some risks associated with them.
In summary, exchange-traded funds (ETFs) have become increasingly popular among investors including occupational pension insurers due to their low costs and ability to offer diversification within various asset classes such as stocks or bonds.
Pension insurers see ETFs as an important component of their overall investment strategy because they offer liquidity and cost-effectiveness while also providing access to a broad range of assets through a single investment vehicle.
However, it’s important for pension insurers to balance their use of ETFs with direct equity investments in order to achieve optimal returns while managing costs effectively.
Overall, while there are some risks associated with using ETFs in an investor’s portfolio
