Welcome to the new my.morningstar.com! Learn more about the changes and how our new features help your investing success.

A Global Guide to Strategic-Beta Exchange-Traded Products - 2016

Third annual global guide to strategic-beta ETPs; Grown more rapidly than the broader ETP market

Our global team of ETF and passive fund analysts published “A Global Guide to Strategic-Beta Exchange-Traded Products,” its third annual global landscape report about trends in strategic-beta exchange-traded products (ETPs). The full report can be downloaded here.

Executive Summary

  • Two years ago, we introduced our naming convention and taxonomy for the fast-growing universe of strategic-beta exchange-traded products, or ETPs. In this year’s guide, we provide an update on the state of the global strategic-beta ETP landscape.
  • In recent years, the space has grown more rapidly than the broader ETP market as well as the asset management industry as a whole.
  • Growth has been driven by new cash flows, new launches, and the entrance of new players—some of which are traditional, dyed-in-the-wool active managers.
  • We expect these trends will continue and may ultimately accelerate as newer ETPs tracking new and unproven benchmarks season and more new entrants make their way into the market.
  • As of June 30, 2016, there were 1,123 strategic-beta ETPs, with collective assets under management of approximately $550.5 billion worldwide.
  • Dividend-screened/weighted ETPs continue to be the most popular grouping of strategic-beta ETPs in all but one region we examined. This should come as little surprise when considered in the context of the prevailing interest-rate environment.
  • Low-volatility/minimum variance ETPs have surged in popularity. As of the end of June 2016, we counted 61 such ETPs worldwide, with collective assets under management of $47.5 billion.
  • The pace of new product launches has accelerated to record levels. The number of strategic-beta ETPs listed globally increased by more than 23% versus June 2015. This is owed in large part to a record number of new launches in the United States, driven by a combination of new entrants and strategy proliferation.
  • A commonality among the markets we examined is the increasing complexity of the benchmarks underlying new ETPs.
  • As these strategies become increasingly nuanced, looking to infuse elements of an active manager’s thinking into an index, investors’ collective due-diligence burden will continue to increase commensurately.
  • An increasingly crowded and competitive landscape will also put pressure on fees. We have already seen instances of aggressive fee reductions for strategic-beta ETPs. We anticipate that cost-competition in this space will become more prominent in the years to come.

 

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Member.

Register For Free

About Author

Morningstar ETF analysts  -

Audience Confirmation


By clicking "accept" I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See "Cookie Consent" for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All Rights Reserved.      Terms of Useund      Privacy Policy.
© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy        Cookies