ETF Investors Lured to AI, Crypto, Fintech

Crypto and AI, now part of this balanced portfolio.

Retail ETF investors are all about innovations and the latest developments in financial services, with younger generations in particular drawn to new categories that they don’t consider speculative. The top areas of interest among ETF owners are financial technology, AI, and crypto, data from Nasdaq’s annual ETF Retail Investor Survey show. For example, about half of Gen Z and millennial ETF investors own shares in crypto funds. People are also more interested in commodities, which is the category with the largest increase in interest at 57%, up from 54% a year ago. Part of the reason is that investors may consider crypto to fall under commodities, said Giang Bui, head of US equities and ETFs at Nasdaq.

“These hot themes are always going to be top of mind,” she said.

Tell Me More. No, Really

One of the biggest findings from the February survey is that ETF investors are becoming less swayed by social media, and instead are turning to more reliable and in-depth sources for their due diligence. “People are digging deep to understand what they’re investing in,” Bui said. “We’ve gotten to a place where there is too much financial content that exists. You’ve got to figure out what the best source of information is.”

The investors surveyed identified what they consider the most reliable sources of information on ETFs:

• 84% said conversations with financial advisors told them what they needed to know.
• 71% said online videos gave them enough information. 
• 70% pointed to online magazine or newspaper articles as top sources.

Going With the Flow: US-listed ETFs brought in well over $1 trillion last year, more than double the 2023 net sales, the report noted. That obviously speaks to demand, but figures from April might be even more telling, Bui said. Despite market volatility amid the tariffs announced the week of April 7, numerous ETFs launched and had overall inflows, she said. “It’s really a testament to peoples’ trust in the ETF structure,” Bui added. “They’re not shying away from ETFs despite what the market might be.”