Barclays reveals half of client ETF holdings are in ISAs

Barclays Stockbrokers found that since January 2009, the number of clients holding ETFs within an ISA has increased by 91%, and by 40% year on year. The number of SIPP accounts holding ETFs has increased 45% year on year. The most popular ETF product held within an ISA is the iShares FTSE 100. Yet clients are increasingly seeking to diversify their portfolios by increasing their exposure to emerging markets. In 2010 the most popular holdings were those which tracked specific markets, for example, the iShares FTSE/Xinhua China 25 and the iShares MSCI Brazil.1 These ETFs continue to remain popular in 2011; however clients are now increasing their exposure to the iShares MSCI Emerging Markets, which has seen holdings by clients of Barclays Stockbrokers increase by 43% year on year.

Research also found that Barclays Stockbrokers clients are seeking exposure to gold through ETF investments within their ISAs.  ETFS Physical Gold accounts for 3% of ISA ETF holdings to date in 2011. Interestingly, this ETF did not feature in the 2010 Top Ten, even though it is currently the ninth most popular holding.

Paul Inkster, Head of Product, Barclays Stockbrokers, comments: "It is encouraging to see clients maintaining their interest in ETFs, in addition to taking advantage of the tax free allowances available through both Investment ISAs and SIPPs. Our clients have consistently seen ETFs as effective and accessible investment vehicles and are increasingly using them to capture short-term market movements, as well as in longer term portfolio construction.

"Although clients trade frequently in the main UK markets, there is a clear trend towards using ETFs to gain international exposure, especially in emerging markets. Clients are seeing ETFs such as the iShares MSCI Emerging Markets as simple and transparent ways to tap into the growth story from those regions, where the practicality of a single investment is favoured over the process of researching and investing in individual stocks, which can be difficult, time consuming and costly."