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Komfie Manalo, Opalesque Asia:

A majority 67% of asset managers polled by advisory services firm EY said they would provide ETF offering in the next five years. The EY report Global ETF Research 2017 said that the entrants would join a market that is expected to reach $7.6tln globally by the end of 2020.

Based on interviews with ETF market makers, service providers and promoters who collectively manage 85% of global ETF assets, the report suggests that ETF providers will face new challenges as the industry grows in size and influence.

Lisa Kealy, EY EMEIA Wealth & Asset Management ETF leader, commented, "ETFs can no longer just be cheaper or more liquid than actively managed mutual funds. The industry will need to innovate around investors, refine investor journeys and reduce investor costs to remain competitive."

The ETF market will be transformed by both current and new investors. The research suggests that 15% to 25% of ETF inflows over the next three years will come from new investors - an inflow of $250bn. Investors typically first turn to ETFs for selected exposures they cannot access elsewhere, but then become more comfortable using them as the building blocks of portfolio construction.

Institutional investors will continue to dominate ETF investing over the next three years, according to 97%......................

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