Financial Services Ireland

Global ETF Survey 2016: Integrated innovation – the key to sustainable growth

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Global ETF Survey 2016: Integrated innovation – the key to sustainable growth

The ETF industry continues to extend its stunning track record of expansion.  We expect strong growth in ETF assets to continue, and predict total industry AUM will reach US$6tn by the end of 2020.  We also expect ETF inflows to be twice those of mutual funds over the same period. These predictions are underpinned by the ETF industry’s commitment to innovation, which is crucial to industry’s ability to meet an ever growing range of needs, and attract an ever wider range of investors.

Our Global ETF Survey 2016 shows that the ETF industry’s characteristically high levels of confidence are tempered with a growing dose of realism.  As the industry grows, it is becoming progressively harder for firms to deliver continued expansion. Competition is getting more intense and the need to invest in technology and compliance is making the ability to achieve scale more vital than ever.

Three strategic drivers emerge as being of particular importance:
  • Product development – the need to balance creativity and growth with prudence and transparency
  • Market entry – the need to consider all options when searching for scale and expansion
  • Digital distribution – the need to leverage rapid developments in technology and investor demand

Each topic illustrates the vital importance of innovative thinking to the industry.  Taken together, we believe they point to a need for many ETF providers to develop a more integrated approach to innovation.

How will ETF’s continue this growth?

If the ETF industry is to fulfil its own lofty expectations for continued growth, then we believe promoters need to focus on four strategic priorities that will enable them to put integrated innovation into practice. They are:

  • Smart, sustainable product development
  • Creativity in the search for scale
  • Transparency related to products, performance and pricing
  • Taking control of the digital agenda

I hope you find the insights in our Global ETF Survey 2016 of use in your strategic planning. Please let me know if you would like to have an in-depth conversation about any aspects of the research and how it may impact your business.

Lisa Kealy

Wealth & Asset Management, Sector Leader
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ETFs Brochure

Global ETF Survey 2016

Integrated innovation - the key to sustainable growth