GLOBAL - The number of institutional investors using exchange traded funds increased 12% in 2008 with nearly 3,000 investors worldwide holding ETFs, a new report from Barclays Global Investors (BGI) showed.
Of the 2,926 investors that reported using ETFs last year, only 48 were pension funds, the study found.
BGI global head of ETF research and implementation strategy Deborah Fuhr said the low penetration among pension funds partly reflects their use of external managers.
She said: "Only the top few are able to buy and sell securities. The rest use external managers."
External managers fall under the investment advisors category which accounted for 2,152 users, the largest category, while hedge funds users totalled 438. The third largest users were banks and trusts with 193 investors.
Fuhr added: "During the market turmoil of 2008 investors became even more concerned about counterparty risk, transparency, liquidity and the use of derivatives and structured products.
"As a result, the use of ETFs to implement exposure to cash, fixed income, commodities and equity indices became more popular."
The overall number of institutional ETF users is up 105% over the past five years and up 952% over the past 10 years.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.