ETF market growth ‘sparks alarm’ among fund managers: survey


ETF market growth ‘sparks alarm’ among fund managers: survey

By Alf Wilkinson 29 February 2024



Blackwater poll indicates major ‘shift in perception’ of ETFs


A majority of European mutual fund managers are concerned about the growth of exchange traded funds, but a rising number believe the ETF market presents opportunities, according to research by consultancy Blackwater.


The poll conducted by the ETF and digital asset specialist consultancy, which surveyed the views of 127 managers spread across Europe, indicates that there has been a major “shift in perception” of ETFs since 2021.

“The impressive growth of ETFs has clearly been noticed and this, coupled with the struggles the mutual fund industry is incurring, has had a definitive impact on their thinking,” Blackwater says.

Some 62 per cent of respondents say they are “concerned” about the growth of ETFs for their business, up from just 18 per cent in 2021.

Nonetheless the research indicates that there has been a “remarkable surge” in the number of managers with plans to “either launch ETFs or intensify due diligence within the next two years”, from 9 per cent in 2021 to 92 per cent this year.

Almost half of those surveyed see a business case for having an ETF offering, meanwhile, compared with 27 per cent in Blackwater’s previous poll.

For 39 per cent of European managers polled, the inclusion of some form of ETF offering is “inevitable for all asset managers striving to maintain competitiveness in the market”, the consultancy finds.

However, the cost of establishing an ETF business is cited as the primary concern for over half of European mutual fund managers.