Last update: 03.03.2018 08:35
ETFs are very popular with investors.
The comparatively low costs of passive funds and the diversified risks are attractive.
Long-term investors can thus invest relatively stress-free. Morningstar, a listed financial information and analysis company, has published its 2017 annual report about the providers of active and passive funds.
Find out what you can learn about ETFs here.
We have already written about asset classes in general and ETFs in particular.
Here we take a look at the providers, the development of ETFs in general and the most popular asset classes.
Who do investors trust with their ETF money?
In terms of assets under management (AUM), Blackrock continues to dominate the ETF market in Europe with its iShares brand.
iShares manages EUR 299 billion in Europe, ahead of xTrackers (the Deutsche Bank brand) and Lyxor (the brand of the French Société Générale).
At the end of December, the latter had valued assets of EUR 71 billion and EUR 64 billion respectively.
Addendum December 2018: Lyxor takes over from Commerzbank’s ETF business under the Comstage brand.
This will make Lyxor the second-largest ETF provider in Europe after Blackrock, relegating Xtracker to third place.
In terms of new business, market leader iShares lost market share with a net inflow of EUR 33.4 billion, falling from 47% (end of 2016) to 44.5% (end of 2017).
Lyxor and xTrackers received EUR 13.1 billion and EUR 11.6 billion respectively, increasing their market shares to 10.6% and 9.6%.
UBS and France’s Amundi are in 4th and 5th place and have made significant gains relative to their size.
From an investor’s perspective, the expansion of Vanguard’s presence in Europe is very exciting.
Vanguard is a US ETF provider organized as a cooperative, which is characterized by good products with favourable conditions.
In 2017, Vanguard was in sixth place in terms of new business – in stark contrast to its home market of the USA.
There, Vanguard once again collected the most inflows of funds in the US fund industry, far ahead of all other providers.
How is the business of active and passive funds developing?
The so-called organic growth rate shows how strongly the passive index fund segment is growing.
Organic growth factors out the influence of market growth as an influencing factor on assets under management.
Listed index funds had an organic growth rate of 18.6% in 2017, non-listed index funds grew by 12.8%, while the actively managed funds segment (excluding money market funds) only grew by 8.1%.
Source: Morningstar
What asset classes is the ETF money in?
In 2017, two thirds of ETF assets under management were again invested in equity products.
Around 60% of new money flowed into equity ETFs and around 27% into bond ETFs.
However, with a growth rate of over 21%, bond products grew faster than equity ETFs (over 17%).
High-yield, emerging market and inflation-indexed bond ETFs saw the strongest growth.
Investors therefore switched to instruments with higher returns and therefore also higher risk.
ETFs on equities are therefore the most popular ETF category.
They carry a higher risk than bond ETFs, but given a little time – a long-term investment horizon is 7-10 years – investors have so far benefited from the higher returns.
