The global ETF market saw the first month of net asset outflows in two years in February, amid the increased market volatility according to ETF.com. Nonetheless, January and February still attracted new net assets of $64 billion, thanks to a strong first month of the year. The long-term picture has been characterised by rapid growth in the ETF market, particularly in the last five years.
European ETF market growth
According to BlackRock, the European ETF market has more than doubled in size in half a decade, and retail investors have embraced them as a key tool to build efficient investment portfolios. Timo Toenges, a member of the Business Strategy team for BlackRock’s EMEA ETF and Index Investing Business, says this has been driven by both increased users and uses. Toenges believes that we will see an acceleration in growth in the European ETF market, and that it is following a similar trajectory to the US ETF market, despite being some way behind.
Are ETFs devouring capitalism?
Paul Singer, billionaire hedge fund manager and activist investor from Elliot Management Corporation says ETFs are in danger of devouring capitalism. Toenges responds that ETFs are only a small share of the total market, and adds that there have been numerous research papers debunking that claim.
Innovations in ETFs
Innovation in ETF products is a key cornerstone of BlackRock’s iShares business. Toenges says the most exciting areas are where BlackRock clients get access to previously too expensive or inaccessible products. Examples of these include thematic investing such as megatrends like automation and robotics.