Active Fund Managers to Launch ETFs

As investors increasingly favour low-cost ETFs, it forces traditional active fund houses to figure out how to adapt to this new landscape

Karen Kwok 2 November, 2016 | 8:49AM
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The global exchange-traded fund market will grow twice its current value to $6 trillion by 2020, according to financial services company Ernst & Young – and investors should expect more active fund managers to launch ETFs. The growth is supported by changing investors’ behaviour and the ongoing low-return environment.

The global ETF market was valued at $3.4 trillion in August 2016, data provided by EY showed. The European ETF market was valued at $533 billion, and is expected to grow to $1.1 trillion by the end of 2020.

“The prediction of a $6 trillion global ETF market value by 2020 does not look particularly outlandish,” said Jose Garcia Zarate, Associate Director of Passive Fund Research for Morningstar. “The increasing popularity across the world of passive as an investing philosophy bodes well for continued asset growth for the ETF market in years to come. This is proving an investor-led revolution that investors around the world actively choose to go down the low-cost route.”

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Karen Kwok

Karen Kwok  is a Reporter for