Institutional investors are increasingly moving into exchange-traded funds (ETFs) and other exchange-traded products (ETPs), and market volatility is one of the main drivers of demand. A BlackRock-sponsored study, conducted by Greenwich Associates, found that institutional investors held 25% of their assets, on average, in ETFs last year. It’s an increase from the 19% reported in 2017.
At the 72nd CFA Institute Annual Conference, hosted by CFA Society of the UK, the rise of the asset class was tracked by Deborah Fuhr, managing partner and co-founder of ETFGI. Fuhr offered a historical perspective and made projections for the future; she expects the ETF/ETP industry to increase to US$8.9 trillion in 2020 and US$22.3 trillion in 2025.
Before starting ETFGI, Fuhr served as global head of ETF research and implementation strategy and managing director at BlackRock/Barclays Global Investors. She frequently writes articles for financial publications and is on the editorial boards of the Journal of Indexes in Europe and the United States, and Money Management Executive. She also sits on the advisory board for the Journal of Index Investing.
This year, archived recordings of every presentation from the CFA Institute Annual Virtual Conference will be available online, with additional insights and commentary published on the CFA Institute Annual Virtual Conference blog.
All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Image courtesy of Neil Walker