European ETFs
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Top growth strategies Expansion and innovation dominate. European ETFs coming of age A survey of Europe’s leading asset managers found that while the European ETF market is rapidly maturing, it faces several challenges. Will ETFs be the game changer for European asset management? Learn what is driving the rise in Europe’s ETF assets and the barriers to overcome. European ETFs today The European ETF Market is five to ten years behind the US 31% expanding to new markets 28% exploring new investment strategies 19% launching new product types 22% capitalizing on new regulatory structures and other avenues 5.1 % growth rate in 2012 $ 7.0 billion 3.5 % of total mutual funds Why investor education is critical Getting investors to make their first ETF trade is the single most important factor 58% of interview participants said improved investor knowledge will drive future retail growth 78% said retail investors are key to growth (21% strong growth and 57% moderate growth) Barriers to entry Scale is the major barrier for entry to the European ETF market. 1 Source: EFTGI research 2 Source: Chartered Institute for Securities & Investment, BlackRock, Investment Company Institute, European Fund and Asset Management Association The future Expansion will be evolutionary, not revolutionary. 69% plan to increase the number of products offered over the next two years by five (19%) to 10 (50%). Yet, 57% expect the success of new launches to decline. Retail ETFs are expected to expand from 15% to 25% of all European ETFs assets over the next several years. Increase in products Decrease in launches Biggest challenges 73% say European ETFs have been unfairly caught in cross regulation 72% spend five to 10 hours a week – one full day on average – dealing with new rules. Most respondents expect the top three players to defend or expand their current market share of around two-thirds of European ETF assets. Yet, 21% expect the top three to be challenged – probably by a large entrant from the US. 42% anticipate more aggressive price competition. Regulations Consolidation Competition 25 % by 2020 15 % in 2013 57 % 69 % European ETF assets are worth 3.5% of the total mutual funds, compared to 8% in the US. 2 European ETFs net inflows hit US $7.0 billion at an annualized growth rate of 5.1 % during the first half of 2012. 1 3.5 % Europe 8.0 % U.S. 0 1 2 3 4 5 6 7 8 9 10 7.0 billion 5.1 % growth rate ¥ Breakeven and critical size is difficult to achieve 37 % Difficult to compete with major players 17 % Difficult to differentiate 25 % Other 21 % 57% moderate growth 21% strong growth 58 % 78 % $ Switzerland Germany United Kingdom The Netherlands France The United Kingdom, Germany, France, Switzerland and the Netherlands possess the largest growth potential.
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A survey of Europe’s leading asset managers found that while the European ETF market is rapidly maturing, it faces several challenges. Will ETFs be the game changer for European asset management? Learn what is driving the rise in Europe’s ETF assets and the barriers to overcome.
Transcript of European ETFs
Top growth strategiesExpansion and innovation dominate.
European ETFs coming of ageA survey of Europe’s leading asset managers found that while the European ETF market is rapidly maturing, it faces several challenges. Will ETFs be the game changer for European asset management? Learn what is driving the rise in Europe’s ETF assets and the barriers to overcome.
European ETFs today
The European ETF Market is
five to ten years behindthe US
31% expanding to new markets
28% exploring new investment strategies
19% launching new product types
22% capitalizing on new regulatory structures and
other avenues
5.1%
growthrate in2012
$7.0billion
3.5%
of totalmutual funds
Why investor education is critical
Getting investors to make their first ETF trade is the single most important factor
58% of interview participants said improved investor
knowledge will drive future retail growth
78% said retail investors are key to growth (21% strong growth
and 57% moderate growth)
Barriers to entryScale is the major barrier for entry to the European ETF market.
1 Source: EFTGI research
2 Source: Chartered Institute for Securities & Investment, BlackRock, Investment Company Institute, European Fund and Asset Management Association
The futureExpansion will be evolutionary, not revolutionary.
69% plan to increase the number of products offered over the next two years by five (19%) to 10 (50%). Yet, 57% expect the success of
new launches to decline.
Retail ETFs are expected to expand from 15% to 25% of all European ETFs assets
over the next several years.
Increase in
productsDecrease
inlaunches
Biggest challenges
73% say European ETFs have been unfairly caught in cross regulation
72% spend five to 10 hours a week – one full day on average – dealing with new rules.
Most respondents expect the top three players to defend or expand their current market share of around two-thirds of European ETF assets.
Yet, 21% expect the top three to be challenged – probably by a large entrant from the US.
42% anticipate more aggressive price competition.
Regulations
Consolidation
Competition
25%
by 2020
15%
in 2013
57%
69%
European ETF assets
are worth 3.5% of the total mutual funds, compared to 8% in the US.2
European ETFs net inflows hit
US $7.0 billion at an annualized
growth rate of 5.1%
during the first half of 2012.1
3.5%
Europe 8.0%
U.S.
0
1
2
3
4
5
6
7
8
9
10
7.0billion
5.1%
growth rate
¥
Breakeven and critical size is
difficult to achieve
37%
Difficult to compete with major players
17%
Difficult to differentiate
25%
Other
21%
57%
moderate growth
21%
strong growth
58%
78%
$
Switzerland
Germany
United Kingdom
The Netherlands
France
The United Kingdom, Germany, France, Switzerland and the Netherlands possess
the largest growth potential.
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