European institutional investors primarily use exchange-traded products as beta tools or to implement asset allocation strategies, with few investors seeing demand for active ETFs, according to an EDHEC-Risk Institute survey released Tuesday.

About 70% of the 174 European institutional managers and private wealth managers who responded to the survey said they primarily use ETFs to gain broad market exposures. About 56% use ETFs for buy-and-hold investments, while 54% use ETFs to gain short-term or dynamic asset allocation exposures.

“There is an increasing demand for short-term dynamic strategies and subsegment exposures,” according to EDHEC’s European ETF Survey 2011, which was conducted from June through August and is also supported by Amundi ETF, an ETF manager. About 74% of the respondents were institutional money managers.

Separately, about 77% said ETFs should remain beta-replicating products and only 11% believed more active ETFs are needed. About 39% would like to see more ETFs that track niche markets.

Emerging markets equity and bonds were in demand, “which may be somewhat related to the recognition that many of the sovereign debt problems investors face in developed markets can be somewhat mitigated by emerging markets bond investments,” according to survey’s accompanying report. Other types of ETFs on the wish list include volatility, commodity and high-yield bond ETFs.

“Investors expect to use ETFs more for portfolio optimization and risk-management strategies,” according to the report of the survey.

In Europe, ETF assets under management totaled about $273.5 billion at the end of 2011, with about 90% being used by institutions, according to data from BlackRock and EDHEC.