Assets under management in exchange traded funds (ETFs) are expected to more than double in size over the next five years, according to a report by PwC.
They will increase from around $3 trillion to $7 trillion by 2021, according to PwC. Over that time, the market will expand through entering new markets and developing further distribution channels and asset classes.
“The global ETF market has a bright future ahead but the next few years will not be without their challenges,” said Nigel Brashaw, global ETF leader at PwC.
Brashaw also stressed the importance of a differentiated investment strategy as a key factor to achieve future growth: “Firms across the globe that wish to take advantage of the booming ETF industry will need to invest in investor education, differentiated products and strong distribution channels.
“There is plenty of competition in the sector and we expect the industry to grow at a healthy and accelerated rate.”
European and North American ETF markets are expected to grow 27 per cent and 23 per cent respectively annually, followed by Asia, where there will be 18 per cent cumulative annual growth.