Key Takeaways
- • Institutional ETF usage among North American investors has moved into the mainstream and is now applied across asset classes and portfolio functions, according to the Coalition Greenwich 2026 North American Institutional ETF Study by Crisil Coalition Greenwich.
- • Institutional allocators of all types and sizes are adopting both active and passive ETFs for tactical and strategic goals, expanding allocations.
- • ETFs are used by institutions to replace index mutual funds, institutional separately managed accounts, active mutual funds, and individual equity holdings.
- • Insurance companies are actively replacing alternative asset classes with ETFs, and 40% of corporate pension funds are using ETFs to replace a variety of managed accounts.
- • Institutions value ETFs for low-cost, low-friction access, often as a beta-capture tool rather than an alpha-generation tool, and for exchange-traded liquidity that allows quick buying and selling.
Summary
ETF use by North American institutional investors has entered the mainstream and is being broadly applied across asset classes and portfolio functions, according to data in the Coalition Greenwich 2026 North American Institutional ETF Study, completed earlier this year by Crisil Coalition Greenwich. The publication, Chief Investment Officer, presents a sampling of the study's findings.
According to Crisil Coalition Greenwich, institutions value ETFs primarily for the low-cost, low-friction access they provide, often as a tool for capturing beta rather than generating alpha. The research indicates that institutional allocators of all types and sizes are continually adopting both active and passive ETFs to accomplish tactical and strategic objectives. The flexibility of the vehicle for both functions has expanded its utility for chief investment officers, leading to increased adoption and expanding allocations.
The study finds that institutional investors are using ETFs to replace a range of other vehicles, including index mutual funds, institutional separately managed accounts, active mutual funds, and individual equity holdings. Insurance companies have been actively replacing alternative asset classes with ETFs, and Crisil Coalition Greenwich reported that 40% of corporate pension funds are using ETFs to replace a variety of managed accounts.
Crisil Coalition Greenwich also noted that ETFs' status as publicly traded securities, traded on exchanges, makes them easy to use and quick to buy and sell, which is a central reason for their appeal among institutional investors.
According to Crisil Coalition Greenwich, institutions value ETFs primarily for the low-cost, low-friction access they provide, often as a tool for capturing beta rather than generating alpha. The research indicates that institutional allocators of all types and sizes are continually adopting both active and passive ETFs to accomplish tactical and strategic objectives. The flexibility of the vehicle for both functions has expanded its utility for chief investment officers, leading to increased adoption and expanding allocations.
The study finds that institutional investors are using ETFs to replace a range of other vehicles, including index mutual funds, institutional separately managed accounts, active mutual funds, and individual equity holdings. Insurance companies have been actively replacing alternative asset classes with ETFs, and Crisil Coalition Greenwich reported that 40% of corporate pension funds are using ETFs to replace a variety of managed accounts.
Crisil Coalition Greenwich also noted that ETFs' status as publicly traded securities, traded on exchanges, makes them easy to use and quick to buy and sell, which is a central reason for their appeal among institutional investors.
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