Since their introduction only two decades ago, ETFs have been undeniably popular. Growing far beyond their initial function of tracking large liquid indices in developed markets, ETFs now hold over $2.6 trillion of assets globally. ETFs are listed on an ever growing number of exchanges and are being used by investors in a growing number of markets. New investor segments continue to integrate ETFs into their portfolios and fund sponsors continue to introduce new products.
The proliferation of ETFs was identified in our AM 2020 publication as one of the six game changers in the asset management (AM) industry. ETFs are no longer a niche product, and their impact will continue to be felt much more widely than imagined. As such, all financial services firms should consider developing an ETF strategy. This may be an obvious choice for firms planning to manage, service, or distribute ETFs, but it is also important for firms that will be competing in an environment that is increasingly shaped by ETFs.
Our research shows that 78% of firms see AuM today of $2.6trn growing to at least $5trn by 2020.
Mutual Funds Leader, PwC US