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Innovation, Asian sales could push ETFs to surpass hedge funds assets in 2014

Monday, January 27, 2014

Komfie Manalo, Opalesque Asia:

Exchange traded funds (ETFs) could surpass the assets of hedge funds before the year ends at the earliest or in the first half of next year at the latest, according to a study released by EY, formerly Ernst & Young, several media said.

According to EY, ETFs assets under management (AuM) currently stands at $2.4tln, or some $200bn short of the estimated $2.6tln hedge fund assets. But EY estimated that ETFs could surpass hedge funds within the next 12 to 18 months to be led by growing sales in Asia.

EY’s ETF leader Lisa Kealy said, "[ETF] growth will come from innovation, from more wide-spread users of, and uses for, ETFs as they take market share from active and other passive competitors."

According to the report, the U.S. markets would grow by 15% per annum while Europe will record up to 20% surge yearly. The Asian region is predicted to post close to 30% growth per year up to 2019.

"The US market is still growing at 15%, which is an incredible rate for a more mature market," EY’s global asset management ETF lead Matt Forstenhauseler said.

Valuewalk said that EY’s survey found that investors are looking for increased investments into the ETF markets in the coming year as the industry offers more produc......................

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