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ETFs & the future of asset management

The shift towards passive investing is likely to accelerate as investors realise the difficulty of outperforming an index.

Passive funds' share of AUM in US equity strategies has increased from 16 per cent in 2005 to 31 per cent in 2015. This 1.9 times increase means that passive funds now account for 31 cents out of every dollar of market assets and that active managers are now competing against one another in a proportionately smaller opportunity pool (69 cents out of every dollar in 2016 versus 84 cents in 2005).

THE use of passive investing products has been a growing part of the industry for some time, but a number of drivers are coming together to accelerate investors' use of these offerings and drive assets under management (AUM) growth in these products to new levels of significance.

As a...

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