For almost three decades, ETFs have been a positive disrupter in the market, showing steady growth and ongoing product innovation. It was no surprise then, that when we published our Multifonds Every Fund Survey last year, 78% of respondents – including asset managers, custodians, third party administrators and professional service providers – felt confident that sustained growth would continue.
Whilst last year’s market volatility ushered an unexpected slowdown in growth, we still saw significant inflows, with much coming from the mutual fund space which witnessed negative returns and outflows. In 2019, the appetite for ETFs remains high; at Temenos we’re seeing investor preference switching to ETFs with an increasing number of clients looking to include ETF servicing in their core investment accounting system.
Smart Beta ETFs have been a particularly important development and source of growth in the sector. And, with almost 900 new ETF products launched last year, product innovation remains hugely energetic. Whilst this, teamed with steady growth, makes the ETF space attractive to investors, innovation introduces complexity and challenges for fund administrators. Trends such as lumping ETFs with mutual funds can also introduce additional technological challenges.
At Temenos, we’ve been busy collecting survey data, looking at ETF trends, and celebrating new business wins and a strategic collaboration with Bloomberg. We’re continuing to work with a wide range clients on many different types of projects and are proud sponsors of ALFI European Asset Management Conference in Luxembourg.