ETF Market to Topple Hedge Funds

LOW COST FUNDS: Investment exchange traded funds will surpass the amount of cash held in hedge funds by 2015 as three-quarters of investors vow to up their exposure

Emma Wall 31 January, 2014 | 11:12AM
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Investors’ appetite for exchange traded products (ETPs) sees no sign of abating. The low-cost tracker funds that are listed on the stock exchange exploded onto the investment scene during the global recession, gaining popularity in volatile markets as investors lost faith in active management. 

Written off by many professional investors as a fad, ETPs have stuck around and are being credited with the recovery of the European investment industry. 

In 2013, $247.3 billion was invested globally into equity ETPs, the largest inflows ever according to ETP provider iShares. This far outpaced the flows seen in 2008 - the only other year inflows surpassed £200 billion. Even fixed income ETP investment grew – up $27.5 billion globally – while in the UK open-end bond funds recorded outflows for the first time on record.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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