Nearly half of exchange-traded fund (ETF) investors are planning to buy a crypto ETF, a figure that matches those who expressed interest in bond ETFs, according to a recent report from brokerage giant Schwab Asset Management.
The "ETFs and Beyond" report, released by Schwab on Thursday, surveyed individual investors and found that while 52% of respondents planned to invest in U.S. equities, 45% indicated interest in crypto ETFs. This interest level in crypto ETFs was tied for second place with U.S. bonds.
Eric Balchunas, Bloomberg's senior ETF analyst, commented on the findings in an X post, noting the results were surprising given the substantial size of the bond market compared to the cryptocurrency market. He stated that it was "shocking to see crypto tied with bonds for second place in where people plan to invest," emphasizing that crypto is "majorly punching above weight" as it represents only 1% of total ETF assets under management, while bonds account for 17%.
Schwab's survey included 2,000 individual investors aged between 25 and 75. Half of these participants had bought or sold ETFs in the past two years and possessed at least $25,000 in investable assets.
Millennials Show Higher Interest in Crypto ETFs
The report highlighted that Millennial investors, defined as individuals born between 1981 and 1996 (aged 29 to 44), demonstrated a greater interest in crypto ETFs compared to other age demographics. Approximately 57% of Millennial respondents indicated plans to invest in cryptocurrency via ETFs. This compares to 41% of Gen X investors, those born between 1965 and 1980.
Baby boomers, born between 1946 and 1964, showed the lowest interest in crypto ETFs, with only 15% planning to invest.
Balchunas also noted that the survey generally reflected a highly optimistic outlook for ETFs across the board, with a significant majority of respondents planning to increase their ETF usage, particularly among younger generations.
Low Cost and Accessibility Driving ETF Adoption
The primary drivers for ETF adoption identified in the report were low costs and accessibility. A substantial 94% of respondents agreed that ETFs help reduce costs within their investment portfolios.
Furthermore, about half of the respondents strongly agreed that ETFs enable them to pursue niche or targeted investment strategies separately from their long-term portfolios and provide access to diverse asset classes.
David Botset, managing director at Schwab Asset Management, commented on the evolving investment landscape, stating that 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 U.S., not only for low-cost core portfolio investments but also to explore the expanding universe of investment opportunities."