Historical performance and the expense ratio were highlighted as the most important factors when selecting ETFs in Europe and the US, according to a survey conducted by Brown Brothers Harriman in partnership with ETF.com.
The survey, which interviewed 300 institutional investors, financial advisers and fund managers across the US, Europe and Greater China, noted the emergence of historical performance as the most important factor "may come as a surprise" as in past surveys the emphasis has always been placed on cost.
In last year's survey, historical performance was the third most important factor when selecting an ETF, with expense ratio topping the charts.
Meanwhile, this year's results showed that the ETF issuer was the third most important factor for respondents in the US and Europe when choosing an ETF, while index methodology and trading spreads were also highlighted by buyers across the globe.
The report said: "Expense ratio continues to rank high, but it is only one among a handful of key factors for investors selecting ETFs."
Andrew Craswell, senior vice president at Brown Brothers Harriman, warned investors should not rely solely on historical performance when choosing an ETF.
"The importance of historical performance is a reflection of the product innovation that is taking place in the ETF market place," Craswell added.
"Products that use smart-beta methodologies or ESG filters will need to establish performance track records for investors to participate.
"This is not necessarily an important factor for core index ETFs that are simply looking to replicate the benchmark."
The survey also found investors want more active and smart-beta ETF strategies in their local markets, with active ETFs highlighted as the key area in the US and Europe where they would like to see greater product proliferation.
When it comes to active ETFs, 30% of European respondents would like to see more global equity products, while 25% said they want more choice in fixed income and 19% named domestic equity.
"Results indicate ETF investors still want active management; they just want to see it in a low-cost wrapper," the report said.
"The survey highlights a difference between the US and Europe - fixed income ranked highest for US respondents, while European respondents had a preference for global equities."
Meanwhile, respondents also highlighted a number of potential headwinds for the growth of ETFs. In Europe, the biggest concern was platforms not making trading easy, with 27% of investors citing this as the key barrier.
Some 23% believe spreads are "too wide and uncertain", while 16% said they do not fully understand ETFs, highlighting the ongoing educational issue the industry faces.
"Platform issues could be a potential headwind in further ETF adoption," the research said. "The results highlight how much opportunity exists for global intermediaries to continue to improve the user experience and make trading ETFs more cost effective."
Furthermore, fixed income trading volume was cited as an additional risk, especially for European respondents, 36% of whom see this as an issue, while 26% pointed to the liquidity of the underlying bonds as a potential concern.