It is not uncommon for my email account to be bombarded by negative press releases warning of substantial outflows of assets or significant losses in some sector or other. But in the last few months, a flurry of reports highlighting record growth of the ETF landscape has graced my inbox, stating assets have reached all-time highs.
While the reports provide ample evidence of a burgeoning market with potential for massive expansion over the coming years, particularly in Europe and Asia, the plans of ETF providers to branch out is further testament to the market’s auspicious growth prospects.
Credit Suisse recently announced its entrance into Italy, listing 17 funds on the Borsa Italiana, which marks the bank’s first foray out of the Swiss ETF market into Europe. The bank is also aiming to unveil a range of funds in Germany over the coming weeks, before expanding into the other main European markets.
HSBC, which entered the ETF arena in August, is another player with ambitious plans to rise to the forefront and become one of the prominent providers in the European market. The bank plans to launch around 50 ETFs into Europe within the next couple of years, before turning its attention to the younger Asian market.
Indeed, the growth story of China has really hit the headlines recently, benefiting ETFs as efficient vehicles through which to access this emerging market. More providers are jumping on the China growth bandwagon, with United Overseas Bank asset management launching its China A-shares ETF in Singapore on November 12.
Nonetheless, there are a few hurdles to overcome in the ETF market, as with every investment sector. Certain industry players have voiced ongoing concern about total expense ratios, claiming they do not actually reflect the true cost of ETFs. Although this concern applies to the wider fund industry as a whole, it is an issue which some users of ETFs are highlighting.
Despite such concerns, which need to be addressed, industry players are certain the market is set to expand exponentially. I look forward to receiving many more reports as assets continue to soar.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation