Contrarian: JVs are shape of things to come for ETF providers

The shape of things to come

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The recent news that Lombard Odier has entered into a new joint venture with ETF Securities is something of a milestone. This corporate tie-up is the harbinger of much bigger change to come in the asset management space.

ETF issuers will increasingly begin to hit barriers to growth, and the only way they can overcome this challenge is to partner with active managers who can begin to make all the marketing hype about smart beta more user friendly. The ETF juggernaut does not look like it is slowing down quite yet. The $2trn mark has been smashed in the US and net retail sales stateside for ETFs are overtaking traditional mutual funds. Most of this momentum is within the equity space, but fixed income is catching up fast. Fixed income ETFs are completely mainstream and development has been so fast that ...

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