Deutsche Asset Management’s (Deutsche AM’s) db X-trackers exchange-traded fund platform recorded USD27.8 billion of net new assets in 2015, making it the third-highest recipient of net inflows of any ETF provider globally.
noted Simon Klein, Head of Distribution for Passive Investments, EMEA & Asia, at Deutsche AM, at a press conference in Frankfurt today.
Deutsche AM secured 8 per cent of global ETF inflows in 2015, was one of the fastest growing ETF providers in the US, and saw an increase in market share to 12.5 per cent in Europe, cementing Deutsche AM as Europe’s second-largest ETF provider by assets under management.
“Transitioning into one of the leading providers of physical replication ETFs, significant expansion of our range of fixed income ETFs as well as an enlarged distribution team have all been cornerstones of our success,” says Simon Klei, Head of Distribution for Passive Investments, EMEA & Asia, at Deutsche AM. “We believe we are well-positioned to move to be among the top four largest ETF providers in the world.”
Deutsche Asset Management is currently the fifth largest ETF provider globally by assets under management.
Deutsche AM aims to substantially strengthen its position as a provider of fixed income ETFs. “This year we will launch a number of new physical replication fixed income products,” says Klein, stressing that new product development will be a key aim. “We lead on innovation in the growth area of strategic beta, as again demonstrated by our solutions in the fixed income field – for example, providing quality-weighted sovereign bond exposure.”
Klein explains that as ETFs secure more assets under management, institutional investors are starting to use them more. Many institutional investors are restricted to holding a maximum of 10 per cent of an ETF’s available assets. Therefore, only by achieving scale have ETFs made it on to the radar of these investors, who are looking for cost-effective and efficient investment in core markets such as Europe, the USA and Germany, and can now find it in the form of ETFs. These investment processes have now been implemented, and could cement a sustained growth trend for the ETF market, notes Klein.
While ETFs are becoming more important for institutional investors, this also applies to private investors, explained Klein. According to one survey, for example, the number of ETF savings plans in Germany has grown by 50 per cent to more than 200,000. Another growth indicator for the ETF market is the fact that private investors can now also invest in diversified ETF portfolios. These are distributed by asset managers, brokers or internet providers. Such digital forms of asset management – also known as robo-advisors – could result in more private investors as customers in future. Their common characteristic is that they use ETFs almost exclusively in their portfolios.