Bringing you live news and features since 2006 

Hector McNeil, HANetf

HANetf gives UK asset managers just three years to launch ETFs


UK asset managers have three years to launch ETF strategies or else they run the risk of failing to get new products off the ground, HANetf has said.

The firm writes that as the UK and Europe’s asset management industries continue to follow the path set in the US, ETF growth is outstripping mutual funds, with flows far in excess of sales of legacy products.
More and more asset managers are reacting to this shift by launching their own ETFs, with a number of well-known groups launching such products this year alone, HANetfs says.
However, for those yet to be convinced, Hector McNeil (pictured), co-CEO of HANetf, warns time is fast running out.
“An ETF is just a piece of technology which has streamlined the investment process, and essentially digitised investing,” he says.
“However, this piece of technology is increasingly important when it comes to distribution, and unless asset managers start to implement such solutions within the next 36 months, it may be too late for them.”
McNeil explains it takes a number of years for ETFs to gain recognition and momentum, and reach a size where they are sustainable from a cost point of view. As such, unless asset managers take them seriously now, they may fail to gain enough assets to make them viable as products for their businesses, he warns.
“It can take two to three years to get traction in an ETF, and so if asset managers have not launched these solutions by 2021, they could struggle to get them off the ground,” he says.
“Asset management groups have told us that they are holding back from creating an ETF strategy because they fear cannibalising existing funds, have concerns around the cost of launching, and worry that, with so many ETFs already available, they would struggle to garner interest, but many of these fears are overblown and can be overcome by engaging with the ETF industry more closely.”
McNeil highlights fears over existing monopolies as one such area that was actually less of an issue if asset managers focused on creating ETFs for specific strategies.
“There is no monopoly in active ETFs built around specific products at the moment, so that is an opportunity for asset managers, and the cannibalisation and cost points are also often overstated,” he says.
McNeil adds while it made little sense launching products where price and scale were the only factor – such as FTSE 100 trackers – there was a much wider business case for launching other products.
“The fact is if they don’t have a solution in this space soon, someone else will take their slot, so they need to consider how best to approach this growing market, especially as the way people invest is changing, becoming more suited to ETFs than legacy products like mutual funds.”

Latest News

The European Fund and Asset Management Association (EFAMA) has published its latest monthly Investment Fund Industry Fact Sheet, which provides..
In line with the report from Computershare this week which revealed the Aussie love of all things ETF, our non-North..
There were 10 new ETF offerings launched for the week, each with a distinct value proposition for investors.  Detailed below..
A summary of the Canadian ETF launches that occurred in November 2023...

Related Articles

Australian flag
A new report published by global financial services company Computershare has revealed key trends in the Australian ETF market during...
Eric Balchunas, Bloomberg Intelligence
ETFs will likely see an uptick of trillions in assets to their already strong flows over the next decade as...
Kim Gibb, Prescient Management Company
Prescient Management Company, an investment fund platform provider in South Africa, has launched the country’s first full-service, co-named platform for...
Thinking outside of the box
BlackRock has published its 2024 Thematic Outlook, entitled Three Key Themes to Get Investors Off the Sidelines....
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by