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November 22, 2017

Global ETF assets to reach $7.6 trillion by 2020: EY

The global exchange-traded fund (ETF) market is expected to increase to $7.6 trillion by the end of 2020, with majority of fund managers likely to have an ETF offering in the next five years, according to a report by EY.

The study found that $250bn, or nearly 15% to 25% of ETF inflows, will be contributed by new investors over the next three years.

Majority (97%) of respondents predicted institutional investors to continue dominating ETF investing over the next three years.

Moreover, 71% of respondents said they expect ETF fees to fall further as a prerequisite to survival. The report noted that assets in passive funds will exceed assets in active funds globally in 10 years.

Also, 43% of the respondents said they believe that there is insufficient competition between index providers and expect more players to foray into the sector, including more self-indexing.

EY Global and Americas wealth and asset management ETF leader Matt Forstenhausler said: “The industry needs to address market and regulatory threats and be willing to respond by developing new products and modifying existing products. A combination of local understanding and global insights can help investors understand the overall business environment and how this will impact investor journeys.”

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