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European mutual fund managers alarmed by ETF growth: Blackwater

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In a rapidly evolving investment landscape, European mutual fund managers are increasingly voicing their concerns and recognising opportunities presented by the surge in ETFs, according to recent data by Blackwater. 

The study found that 62 per cent of European mutual fund managers are now expressing apprehension regarding the growth of ETFs, a significant increase from 18 per cent reported in 2021.

Furthermore, the firm writes that their latest survey reveals a shift in perspectives, with 46 per cent of European mutual fund managers acknowledging a compelling business case for incorporating ETF offerings, a substantial rise from 27 per cent in the previous year. This paradigm shift underscores a growing recognition of the potential benefits ETFs can bring to traditional mutual fund businesses, the firm says.

When probing the challenges associated with venturing into the ETF space, the cost of establishing an ETF business emerges as the primary concern for European mutual fund managers. A staggering 54 per cent of respondents cited this as their chief apprehension, highlighting the financial hurdles inherent in adapting to this evolving market segment.

Despite these challenges, the data suggests a palpable momentum towards ETF integration among European mutual fund managers. A striking 92 per cent of respondents indicate plans to either launch ETFs or intensify due diligence within the next two years, a remarkable surge from a mere 9 per cent in 2021, the firm says. 

Moreover, 39 per cent of surveyed managers perceive the inclusion of some form of ETF offering as inevitable for all asset managers striving to maintain competitiveness in the market.

Recognising the evolving landscape, 77 per cent of European mutual fund managers view the development of actively managed ETFs as a distinct opportunity. This sentiment underscores a growing willingness to explore innovative approaches within the ETF domain, positioning managers to adapt and thrive amidst industry transformations.

The findings of this survey by Blackwater underscore the dynamic nature of the investment landscape and the imperative for mutual fund managers to adapt to emerging trends, the firm says.

As the ETF market continues to expand and evolve, European mutual fund managers are confronted with both challenges and opportunities, necessitating strategic foresight and proactive engagement to navigate the shifting terrain successfully, the firm says.

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