The ETF industry has seen record growth this year as investors increasingly turn to low-cost investment options, but the US regulator is becoming concerned the $3trn industry could be responsible for exacerbating market volatility.
Inflows into ETFs have been strong across the board, with assets in bond products ballooning past the $600bn mark by the end of September, while smart-beta offerings in Europe have seen a 40% increase in AUM to $30bn. Overall assets in ETFs have doubled from $1.5trn in 2010 to $3trn at the end of 2015, and in a recent report PwC said it expects this figure to jump to $8trn by 2021. The strong inflows suggest investors are increasingly looking for low-cost alternatives to active funds and becoming savvier when it comes to the more complicated smart-beta offerings. Some might say the...
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