Raphael Stern (pictured), new Head of Portfolio Management EMEA at Invesco PowerShares, answers some questions from etf express on his new role.
Tell me a bit about your new role?
This is a new position of European portfolio manager, highlighting PowerShares’ deep commitment to expansion in the region. As we grow the UCITS range of products to cater for the accelerating flows into EMEA-listed exchange traded funds, it becomes essential to have local talent and portfolio management capabilities. This expansion will also allow us to take better advantage of London trading hours and liquidity in underlying bonds.
How will you work with Source, within Invesco PowerShares?
Source was acquired by Invesco, and the deal completed in August. Source is being fully integrated into Invesco PowerShares in EMEA, Invesco’s European ETF business.
What will be its specialisms?
Invesco PowerShares is a forward-thinking fund provider that offers over 80 ETFs in Europe, from simple funds tracking well-known indices to ‘smart beta’ strategies. We focus only on ETFs, so we have the market knowledge to help clients trade them efficiently too. Because we are part of Invesco, clients also benefit from the ideas and expertise of one of the world’s largest independent asset managers.
What do you see will be growth areas for the UK and Europe in ETFs?
In terms of geographic index exposure, EMEA was the clear leader over the past year. Both physical fixed income and equity ETFs have done extremely well in terms of new assets. The majority of those flows have been in market cap weighted, or passive strategies.
Any new trends you can see?
We believe flows into ETFs will continue at an increased pace in the UK and EMEA. Our product positioning is such that we are well positioned to capture flows into passive, active, and smart beta strategies. We foresee both retail and institutional investors to increase their allocation to ETFs, both as part of their core and satellite strategies.
Will ETF demand in the UK and Europe continue to grow and if so what are the drivers?
Demand for ETFs will grow in both the UK and Europe as more investors become familiar with the product and its benefits. If we look at the evolution of the U.S. ETF market as a reference, the demand for ETFs in the UK and Europe should continue to accelerate over the coming years.