European traders are wary of passive investment growth

European traders are wary of passive investment growth

While a vast majority of European traders has witnessed a shift from active towards passive investment vehicles, only a minority believe that this trend could be positive for their companies, a recent survey conducted by SIX Swiss Exchange revealed.

According to the poll, conducted among 185 traders across Europe, 88% of respondents have seen a shift from active to passive and 72% expect this trend to intensify next year.

At the same time, only 40% of respondents believe that the changes resulting from the growth of passive investments will have a positive impact on their companies.

Traders identified cost pressures as the key reason for the growth of passives (%44), followed by the planned introduction of Mifid II (31%), while the trading environment was only seen as a secondary factor (17% said it contributed to the trend).

The survey also revealed that traders saw regulation as the single biggest challenge they faced, according to 73% of respondents.

When it came to identifying factors driving their trading activity, 46% of respondents cited the European Central Bank interventions as key factor, followed by the introduction of Mifid II (24%), the effects of Donald Trump’s presidency (16%) and Brexit (11%).