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How has the fund industry changed over the last 10 years?
Asset Managers

How has the fund industry changed over the last 10 years?

Increased interest in sustainable investments, strong asset growth and the rise of robo advisors are some of the changes in the industry.
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27 FEB, 2023

By Constanza Ramos

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The fund industry has undergone significant changes over the past 10 years. Some of the key changes are:

Overall, the fund industry has become more competitive, with a greater focus on innovation, technology, and cost reduction.

Nina Petrini, head of UBS ETFs and index funds for UBS AM in Iberia and Latam, gives us her vision for the ETF industry.

She points out that the growth in ETF AuM has been exponential, unlike other financial products within the industry. "The Global ETF industry gathered $856.16 Bn in net inflows in 2022, following the record annual net inflows of $1.29T in 2021. The European ETF market has grown by 19% CAGR over the last decade alone. Globally the numbers are even higher with a CAGR of 22% over a 10-year basis*", she details.  

On the other hand, she points out that, the simplicity, transparency, liquidity, and ease "with which capital markets have included this specific segment in their trading capabilities, all helped to satisfy the increasing demand for such instruments. This has led to ETF AuM in Europe alone reaching a staggering 1.4T USD, up from only 331m ten years ago**".  

In terms of products, Petrini says, traditional core equity ETFs replicating plain vanilla indices "have been increasingly supplemented by innovative fixed-income benchmarks, and therefore new fixed-income ETFs. Alternative asset classes such as commodities are replicated synthetically to round out the offering. And then came sustainability! UBS Asset Management had already launched its MSCI SRI range over a decade ago, and since then collaborated with various index providers to continue innovating in the ESG and climate space. Sustainability has become a significant trend that the overall financial industry has had to adapt to, to meet growing client demand".

* Source: All market data is sourced from ETFGI global and regional research. ** Source ETGI Dec 31.12.22, Dec 31.12.12.

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