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Wealthy Investors Want ETFs

Wealthy Investors Want ETFs
November 2, 2012

We know that wealthy individuals enjoy nice cars and homes, but where do they invest their money? 

An annual survey by Tiger 21 shows its members are favoring exchange-traded funds (ETFs) linked to major stock and bond benchmarks over stock picking. 

Tiger 21 is a group of 200 high net worth entrepreneurs. Members meet monthly throughout Canada and the U.S. to share investing ideas. To become a member, a minimum net worth of $10 million is required along with paying annual dues of $30,000.

The combined investable assets of the Tiger 21 club are around $19 billion.

According to the latest survey, here are the investments that members use:

43% favor individual stocks
23% favor index funds/ETFs
21% favor hedge funds
13% favor mutual funds

The typical Tiger 21 member has the following asset mix:

23% in real estate
22% in stocks
15% in private equity
13% in bonds and cash
10% in hedge funds
1% in commodities

At the end of September, there was $1.3 trillion in U.S. listed exchange-traded products. The SPDR S&P 500 ETF (SPY), SPDR Gold Shares (NYSEARCA:GLD), and Vanguard Total Bond Market ETF (NYSEARCA:BND) are among the largest ETFs by assets.

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