HANetf, the white label ETF provider, says that it agrees with the forecast published by Bank of Ameica that th global ETF market could hit assets of $50trn by the end of the next decade, based on the current growth rate, and that this portends significant growth in the European ETF maret over the next 10 years.
BoA's figures point to 25% annual growth over the past decade. Such a growth rate should be supported in the next 10 years because of innovation in the ETF market and introads into fixed income.
Hector McNeil, co-CEO of HANetf, said: "The last decade has seen some excellent growth numbers for ETFs but the next one is where we will see them really take off. We agree with the Bank of America's forecasts and anticipate that the ETF is just getting started as a product wrapper in the European market. The US market has a well-established ETF market and passive ETFs have a penetration of around 40-45%; whereas Europe is still less than 10%. We therefore believe that the exponential growth will be even more impactful for Europe."
"We see a couple of major trends for the European ETF market in the next decade. The first is wider acceptance of the exchange listed product approach by fund managers and investors, which in turn will translate into much larger levels of assets under management."
"The second trend is the emergence of the active ETF as an alternative to traditional routes to market for fund managers. There is still a perception that the ETF market is for the big names that have dominated the European playing field to date, but that is starting to change as barriers to entry have come down. The European market is just getting started and over the next 10 years we expect to see rapid expansion, not just in terms of pure assets, but also in choice and sophistication. Since launching HANetf two years ago we have had nearly 500 enquiries from asset managers who want to discuss using our platform to enter the ETF market. With 150 years of ETF experience and the ability to get a fund launched in 10 weeks, this makes our proposition very appealing."
"Remarkably in such a small time we have issued ETFs for an established US provider, a South African mutual fund provider, a Kuwaiti asset manager and our latest client was established over 1,000 years ago and is owned by the UK government, and this is just the start. We expect many more companies with great IP, brands and content to enter the ETF market using our platform."
According to HANetf, it has more Ucits ETF products in the pipeline for 2020.