2
2020 Trends in Investing Survey
About the 2020 Trends
in Investing Survey
The 2020 Trends in Investing Survey was conducted by the Journal of
Financial Planning and the Financial Planning Association® (FPA®), and
sponsored by Janus Henderson Investors, an FPA Strategic Partner.
The survey was elded in March 2020 and received 242 online responses
from nancial advisers who offer clients investment advice and/or
implement investment recommendations.
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2020 Trends in Investing Survey
Environmental, social, and governance (ESG) funds are gaining popularity,
and nancial advisers may be shifting to more equities during the market
downturn caused by the COVID-19 pandemic, according to the 2020 Trends
in Investing Survey, conducted by the Journal of Financial Planning and the
Financial Planning Association
®
(FPA
®
), and sponsored by Janus Henderson
Investors.
ESG funds were rst added to the survey in 2018, when 26% of advisers
indicated they were currently using or recommending ESG funds with clients.
That percentage remained steady at 26% in 2019 and increased meaningfully
to 38% of advisers currently using or recommending ESG funds in 2020.
Nearly one-third (29%) of advisers indicated in the 2020 survey that they
plan to increase their use/recommendation of ESG funds over the next 12
months. And almost 40% of advisers indicated that, in the last six months,
clients have asked them about investing in ESG funds.
The 2020 survey results also reveal how the COVID-19 pandemic is starting
to impact asset allocation, economic outlooks, and investing decisions.
Survey results suggest they plan to pull back somewhat on recommending
cash and equivalents, while increasing their recommendations of some
equities.
Advisers were asked which investments they intend to increase and decrease
their use of over the next 12 months. ETFs were chosen by 52% of survey
respondents when asked which investments they plan to increase their use
of over the next 12 months. In addition, almost one-third (29%) plan to
increase their use of ESG funds in 2020 (compared to 19% in 2019), and
one-quarter plan to increase their use of individual stocks (compared to
15% in 2019). Meanwhile, 14% of advisers said they plan to decrease their
use/recommendation of cash and equivalents in 2020, compared to 5% who
indicated so in 2019.
FPA’s annual Trends in Investing survey was rst conducted in 2006. Year-
over-year results have illustrated the eects of the 2007–2008 nancial
crisis, with a clear shift out of individual stocks and into index products
including ETFs and mutual funds (see the graph on page 5). The 2020 survey,
elded during March, is unique because of the COVID-19 pandemic. Future
surveys will likely continue to illustrate the eects of the pandemic on
investment decisions, asset allocation changes, and economic outlooks.
Executive Summary
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2020 Trends in Investing Survey
Which investment vehicles do you currently
use/recommend with your clients
*Separately managed accounts, structured products, and precious metals were not included prior to the 2019 survey.
2018 2019 2020
Exchange-traded funds (ETFs)
87% 88% 85%
Cash and equivalents
83% 80% 75%
Mutual funds (non-wrap)
73% 70% 75%
Individual stocks
56% 54% 51%
ESG funds
26% 26% 38%
Individual bonds
46% 42% 37%
Mutual fund wrap program(s)
32% 31% 30%
Variable annuities (immediate and/or deferred)
28% 26% 26%
Separately managed accounts
N/A 26% 25%*
Fixed permanent life insurance products
23% 24% 24%
Fixed annuities (immediate and/or deferred)
26% 23% 24%
Indexed annuities
16% 15% 18%
Individually traded REITs (not held in mutual fund)
22% 20% 15%
Variable permanent life insurance
18% 14% 13%
Non-traded REITs
13% 13% 10%
Private equity funds
12% 12% 9%
Other alternative investments (if bought directly,
not included in other investment vehicles)
17% 13% 8%
Structured products
N/A 11% 7%*
Options
13% 9% 7%
Precious metals
N/A 5% 5%*
Hedge funds (directly, not through mutual funds)
9% 8% 4%
Other
9% 4% 2%
Cryptocurrencies
1% <1% <1%
Investments Used
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2020 Trends in Investing Survey
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
ETFs Cash and
Equivalents
Mutual Funds
(non-wrap)
Individual
Stocks
ESG Funds Individual
Bonds
Mutual
Fund Wrap
Program(s)
Variable
Annuities
Fixed
Annuities
Changes to Investment Usage, 2006–2020
Q: Which investment vehicles do you currently use/recommend with your
clients? (select all that apply)
Source: FPA Trends in Investing Surveys (not all options are displayed here). ESG funds were not included prior to the 2018 survey.
Results are ordered by 2020 data.
Key Finding: ESG Funds on the Rise
Environmental, social, and governance funds were rst
added as an optional investment vehicle to the survey in 2018,
when 26% of advisers indicated they were currently using
or recommending ESG funds with clients. That percentage
remained steady at 26% in the 2019 survey, and increased
meaningfully to 38% in 2020. This supports other industry data
that indicates an almost four-fold increase in new assets in ESG
funds from 2018 ($5.5 billion) to 2019 ($20.6 billion), according
to Morningstar*. And, in the 2020 Trends in Investing Survey,
nearly one-third (29%) of advisers indicated they plan to
increase their use/recommendation of ESG funds over the next
12 months.
* cnbc.com/2020/01/14/esg-funds-see-record-inows-in-2019.html
2006
2010
2014
2018
2020
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2020 Trends in Investing Survey
ESG Themes and Sustainable Investment
for Client Portfolios
A commentary from Janus Henderson Investors
Environmental, Social and Governance (ESG) investing across
the globe has seen dierent levels of uptake. While investors
in Europe and Asia have increased focus on ESG factors within
allocations for several years, U.S. investors are earlier in their
shift toward these considerations within their investment
portfolios. A key objective for ESG investment is the goal of
generating sustainable, long-term returns. To this objective, the
Janus Henderson Global Sustainable Equity Strategy has been
managed for almost 30 years for investors.
Sustainable investing is broader than factoring into account
ESG considerations, though that is an important element. At the
heart of our investment process is the belief that the sustainable
investment returns may be generated by companies that provide
solutions to today’s challenges by creating wealth and meeting
societal needs without damaging our natural capital. Our
approach seeks to invest in leading companies whose products
or services are of benet to the development of a sustainable
global economy. In doing so, we actively avoid investing in
companies with products or services that do environmental or
social harm. In tandem, sustainable investing should focus on
companies with attractive nancial characteristics and that
demonstrate strong management of operational ESG factors/
issues.
Environmental and social considerations form the foundation
of our investment framework. We aim to invest in businesses
that are strategically aligned with the powerful environmental
and social trends changing the shape of the global economy:
climate change, resource constraints, aging population, and
population growth. We believe these businesses should exhibit
capital growth by virtue of having products or services that
enable positive environmental or social change and thereby have
an impact on the development of a sustainable global economy.
Companies are assessed to see if they fall under at least one of
our 10 environmental and social themes that encompass positive
criteria. This assessment is based on the impact of the products/
services the company oers. It is quantitative and qualitative
in nature and involves a rigorous look at the life cycle of the
product or service.
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2020 Trends in Investing Survey
There are two sides to sustainable investing. We believe it
is equally important to avoid investing in companies whose
products or services negatively impact the environment or
society and that are contrary to the United Nations Sustainable
Development Goals as it is to invest in companies that have
a positive impact. For this reason, we actively avoid direct
investments in fossil fuels, tobacco, weapons, alcohol, meat and
dairy production, fast food and sugary drinks, toxic chemicals,
and fur. While many consumer brands may not operate for the
purpose of a sustainable economy, there are plenty of companies
that have come to recognize that a sustainable approach to
delivering goods and services and providing solutions to social
and environmental problems can be a protable enterprise.
Sustainable Investments in Client
Portfolios
In general, we’ve seen sustainability strategies be more resilient
during market downturns. While it is likely too early to say with
any certainty that we can see the eects of the coronavirus
pandemic on the appetite for sustainable investment, we are
hopeful this crisis will serve to underline the attractiveness of
sustainable investing and how it may lead to better outcomes,
not only for investors but also for the environment and for
society. As such, sustainable investment may have a role
in client portfolios beyond the traditional equity and xed
income mix. Sustainable investment strategies can serve as a
core or a satellite exposure in a portfolio, and as ESG factors
are integrated into the broader investment process, dedicated
sustainable investment strategies may serve to actively tilt
portfolios toward these factors. As early adopters of sustainable
investment, we believe that persistent investment returns are
generated by companies with resilient, compounding growth
characteristics, and these attributes are more often found in
companies that are on the right side of sustainability trends.
— Janus Henderson Sustainable Equity Investment Team
(for more perspectives, visit janushenderson.com/esg)
Environmental, Social and Governance (ESG) or sustainable investing takes into
consideration factors beyond traditional nancial analysis to select securities. This
may limit the available investments and result in performance and exposures that
dier from other strategies or broad benchmarks focused on similar areas of the
market. Janus Henderson is a trademark of Janus Henderson Group plc or one of its
subsidiaries. © Janus Henderson Group plc.
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2020 Trends in Investing Survey
Which investment vehicles do you expect to increase
your use/recommendation of in the next 12 months?
2019 2020
Exchange-traded funds (ETFs)
45% 52%
ESG funds
19% 29%
Individual stocks
15% 25%
Mutual funds (non-wrap)
19% 24%
Cash and equivalents
25% 22%
Mutual fund wrap program(s)
14% 19%
None. I do not plan to increase the use/
recommendation of any investment vehicles
18% 19%
Indexed annuities
8% 12%
Fixed annuities (immediate or deferred)
11% 11%
Individual bonds
16% 11%
Variable annuities (immediate or deferred)
8% 11%
Separately managed accounts
9% 9%
Fixed permanent life insurance products
6% 8%
Structured products
6% 7%
Options
2% 5%
Private equity funds
6% 5%
Non-traded REITs
3% 4%
Other alternative investments (if bought directly,
not included in other investment vehicles)
7% 4%
Precious metals
3% 4%
Variable permanent life insurance
4% 3%
Individually traded REITs (not held in mutual
fund)
4% 2%
Hedge funds (directly, not through mutual funds)
4% 1%
Cryptocurrencies
<1% 0%
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2020 Trends in Investing Survey
Which investment vehicles do you expect to decrease
your use/recommendation of in the next 12 months?
Key Finding: A Move to Equities?
When asked which investments they intend to increase and decrease their use of over the next 12 months,
advisers’ responses appear to indicate a move away from cash and into more equities—particularly
compared to 2019 survey results. For example, when asked which investments they plan to increase their
use of, 52% of advisers said ETFs in 2020, compared to 45% in 2019. Almost one-third (29%) said they
plan to increase their use of ESG funds in 2020, compared to 19% in 2019, and 25% plan to increase their
use of induvial stocks, compared to 15% in 2019. Meanwhile, 14% of advisers said they plan to decrease
their use/recommendation of cash and equivalents in 2020, compared to 5% who indicated so in 2019.
2019 2020
None. I do not plan to increase the use/recommendation
of any investment vehicles
36% 44%
Mutual funds (non-wrap)
19% 17%
Individual stocks
23% 15%
Individual bonds
13% 15%
Cash and equivalents
5% 14%
Variable annuities (immediate or deferred)
9% 7%
Fixed annuities (immediate or deferred)
5% 6%
Mutual funds wrap program(s)
5% 6%
Indexed annuities
3% 5%
Exchange-traded funds (ETFs)
6% 4%
Non-traded REITs
4% 4%
Cryptocurrencies
0% 3%
Hedge funds (directly, not through mutual funds)
1% 3%
Separately managed accounts
1% 3%
Individually traded REITs (not held in mutual fund)
3% 2%
Variable permanent life insurance
2% 2%
Fixed permanent life insurance products
2% 2%
Private equity funds
<1% 2%
ESG funds
<1% 2%
Precious metals
<1% 2%
Options
2% 1%
Structured products
1% 1%
Other alternative investments (if bought directly,
not included in other investment vehicles)
<1% 1%
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2020 Trends in Investing Survey
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Bullish Somewhat Bullish Neutral Somewhat
Bearish
Bearish
What Is Your Investment Outlook?
In March 2020, advisers generally had a more
optimistic economic outlook for the longer term
(the next ve years) compared to the shorter term
(next six months). Overall, advisers’ economic
outlook has shifted over the last two years. In
2019, advisers were more bullish for the short-
term than they are now. And, in 2019, an uptick
in a bearish outlook for the 2019–2021 period
indicated possible uncertainty following the 2020
election. In 2018, advisers were generally bullish
for the next six months, but their longer-term
expectations for the economy were waning. In
2020, the opposite appears true.
Economic Outlook
Next 6 months
Next 12 months
Next 2 years
Next 5 years
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2020 Trends in Investing Survey
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Bearish
Somewhat Bearish
Neutral
Somewhat Bullish
Bullish
What Is Your Economic Outlook for the Next 6 Months?
Key Finding: Market Outlook
Shifts Amidst a Pandemic
Advisers were asked about their economic outlook
for the next six months, 12 months, two years, and
ve years. When results of the entire survey period
(March 7–31) are split into two periods, before
and after March 13*, a shift emerges in advisers’
short-term outlook. In early March, advisers were
generally neutral or somewhat bearish, with just
12% bearish. After March 13, almost one-third of
advisers were bearish (31%). Clearly, the COVID-19
pandemic is aecting advisers’ short-term
economic outlook.
*On March 13, President Trump declared a national state of
emergency concerning COVID-19.
3/7-3/12 3/13-3/31
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2020 Trends in Investing Survey
CLIENTS ASKING ABOUT CORONAVIRUS
AND VOLATILITY
The 2020 survey was elded between March 7 and March 31.
It is no surprise then that advisers reported that clients were
asking about the eects of general volatility (76%) and the
coronavirus (70%) in their portfolio. Most advisers also reported
that clients were asking about how the SECURE Act might
impact their portfolio and/or their overall retirement plan. And
compared to 2019 survey results, advisers reported less interest
among clients in investing in marijuana or cannabis stocks and
companies, as well as cryptocurrencies in 2020.
Which topics have clients inquired about in the past 6 months?
*Coronavirus and the SECURE Act were added to the survey in 2020.
Additional Resource: If you’re elding questions from clients wondering if they should tap into their
IRA or employer-provided retirement plan during this time of volatility, access the June 2020 Journal
of Financial Planning article, “Exploring the Financial Planning Decisions Related to Greater Access to
Retirement Funds Via the CARES Act,” by Kenn Tacchino, J.D., LL.M. This special report, available at
FPAJournal.org, oers guidance on common client questions.
2019 2020
Effects of general volatility on their portfolio
70% 76%
Effects of the coronavirus on their portfolio
N/A 70%*
Effects of the SECURE Act on their portfolio and/or their
overall retirement plan
N/A 52%*
Fees and other costs of investments
50% 43%
Investing in ESG/socially responsible investing
35% 39%
Investing in maruana or cannabis stocks/companies
55% 34%
Effects of tax reform (Tax Cuts and Jobs Act) on their
portfolio
51% 27%
Investing in cryptocurrencies
25% 17%
Other
4% 2%
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2020 Trends in Investing Survey
Taking Another Look at Asset Allocation
Similar to previous years, the 2020 survey results show that the majority of advisers (57%) have re-
evaluated their asset allocation recommendation within the last three months. And among those
advisers, 66% said the reason for doing so was simply because they continually reevaluate their asset
allocations. However, advisers’ reasons for doing so did change later in March, most likely in response to
the COVID-19 pandemic (see the table below).
Additional Resource: If you are reevaluating your asset allocation strategy, you may be wondering if
your traditional approach will suce during this time of volatility and uncertainty. Adam Hetts, vice
president, head of portfolio construction and strategy at Janus Henderson Investors, quells these
concerns in his June 2020 Journal of Financial Planning article, “Portfolio Analysis in a Time of Chaos”
(available at FPAJournal.org).
Reasons for Reevaluating Asset Allocation
Q: I reevaluate the asset allocation strategy I typically recommend/
implement because of anticipated/existing changes in (select all that apply)
The survey was open March 7–31. On March 13, President Trump declared a national state of emergency concerning COVID-19.
Period 1
(3/7 to 3/12)
Period 2
(3/13 to 3/31)
Total Period
(3/7 to 3/31)
Legislation (TCJA, etc.)
23% 26% 25%
The economy in general
26% 64% 57%
Market volatility
45% 58% 52%
Specic investments
25% 22% 23%
Ination
11% 19% 15%
Administrative aspects of investments (cost, lead manager, etc.)
21% 13% 17%
Client and industry interest in ESG factors
7% 15% 11%
I continually reevaluate the asset allocation strategy I typically
recommend/implement
71% 61% 66%
Asset Allocation
and Active vs. Passive
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2020 Trends in Investing Survey
Active Vs. Passive
The majority of advisers (66%) continue to favor
a blend of active and passive management—a
consistent trend for the last several years. However,
2020 results show a slight decrease in a pure passive
approach. Twenty-four percent of 2020 survey
respondents said passive management provides the
best overall investment performance (taking costs
into account), down from 29% in 2019.
Q: In general, which type of management do you think provides
the best overall investment performance taking into account
costs associated with each management style?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2014 2015 2016 2017 2018 2019 2020
Active Management Passive Management A Blend of the Two
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2020 Trends in Investing Survey
Independent IAR/RIA 54%
Registered rep, independent adviser
aliated with a B-D
19%
Dually registered adviser 9%
Unregistered planner/adviser 8%
Registered rep, employee for a B-D 5%
Registered rep working for a bank, credit
union, or savings & loan
3%
Other 2%
What is your primary practice model/registration status?
What designations do you hold?
How many years have you been in the nancial services profession?
About the Respondents
How are you compensated by your clients for your investment services?
35% 22% 18% 13% 12%
21 or more 5 or less 6 to 10 11 to 15 16 to 20
61% 38% 1%
Fee only Fee and commission Commission only
79% 21% 10% 8% 5% 3%
CFP® FINRA registered rep None AIF® ChFC® CFA
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2020 Trends in Investing Survey
About the Journal of Financial Planning
First published in 1979, the mission of the Journal of Financial Planning is to expand the body of
knowledge in the nancial planning profession. With monthly feature articles, interviews, columns, and
peer-reviewed technical contributions, the Journal’s content is dynamic, innovative, thought-provoking,
and directly benecial to nancial advisers in their work. Learn more.
About the Financial Planning Association
The Financial Planning Association
®
(FPA
®
) is the principal membership organization for CERTIFIED
FINANCIAL PLANNER™ professionals, educators, nancial services professionals and students who are
committed to elevating the profession that transforms lives through the power of nancial planning.
With a focus on the practice, business and profession of nancial planning, FPA advances nancial
planning practitioners through every phase of their careers, from novice to master to leader of the
profession. Learn more about FPA at FinancialPlanningAssociation.org and follow on Twitter at
twitter.com/fpassociation.
About Janus Henderson Investors
Janus Henderson Group (JHG) is a leading global active asset manager dedicated to helping investors
achieve long-term nancial goals through a broad range of investment solutions, including equities,
xed income, quantitative equities, multi asset and alternative asset class strategies.
Janus Henderson has approximately $294.4 billion in assets under management (at 31 March 2020),
more than 2,000 employees and oces in 27 cities worldwide. Headquartered in London, the company is
listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).
Learn more about Janus Henderson Investors at janushenderson.com.
Janus Henderson is a trademark of Janus Henderson Group plc or one of its subsidiaries.
© Janus Henderson Group plc
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