Exchange-traded funds are undeniably popular, but one in four financial advisers, 25.8%, do not use them in their clients’ portfolios, a survey of 768 advisers by Kasina and Horsesmouth found.

“Although there has been tremendous growth with this product, our survey reveals that there is still a sizeable market that has yet to adopt ETFs within their client portfolios,” said Hari Krishnaswami, product manager of FA Vision, the Kasina unit that handled the survey. “Even those advisers who have adopted this product have yet to allocate significant assets.”

Of those advisers who did hold ETFs, 40.1% did not increase their allocation over the past 12 months. A small number, 3.9%, decreased their allocation.

Among advisers at traditional wirehouses, 94.9% use ETFs, but only 36.8% of advisers at insurance companies use them. Independent RIAs were the most comfortable committing assets to ETFs, putting an average of 26.7% of their clients’ portfolios in ETFs.

But advisers hold ETFs for far shorter periods than mutual funds, with an average holding period of 22.2 months for ETFs and 36.0 months for mutual funds.

“Overall, while it is clear that ETFs have taken hold with advisers, there are still plenty of opportunities for ETF providers to win new business and increase existing allocations,” Krishnaswami said. Nearly a third, “60.3% of advisers who use ETFs believe they are a fit for both growth and income portfolios, highlighting the potential to move beyond a niche allocation.”