ETF product supply 'reaching saturation point' despite rapid growth in assets

Innovation becoming increasingly difficult

Despite the growing popularity of exchange-traded funds (ETFs), the supply of products to the market 'is reaching a saturation point' as launching new innovative offerings becomes increasingly difficult.

According to the Global ETF Survey 2016, conducted by consultancy EY, 64% of ETF providers do not expect the success rate of new products to improve in the future (see chart, below). The report surveyed 70 leading ETF promoters, investors, market makers and service providers across the US, Europe and Asia Pacific, making up some 86% of total assets in ETFs. European smart-beta ETFs see record growth in 2016 This market is expected to nearly double by 2020 with assets under management (AUM) growing from $3.4trn to $6trn.  Assets in European-listed ETFs are expected to increase at...