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ETF trends in the late bull run

   
       

    With selectivity becoming more important, smart ETFs capturing factor exposures through systematic, rules-based approaches are increasingly used in private client portfolios, although the complexity of these instruments, and their relatively short track record, means due diligence is crucial.

    As correlations between sectors remain low, sector ETFs offering more granular exposure are also in demand, while sustainable ETF solutions greatly appeal to private investors’ emotions and values.

       

    Industry experts joined PWM in a roundtable discussion:

     Christophe Leroy, Head of Discretionary Portfolio Management, Switzerland, BNP Paribas Wealth Management 

     Jacques Lemoisson, Head Global Macro and Alternative Investment Solutions, CBH Bank 

     Romy Cuadras, Global Head of Fund Solutions, Deutsche Bank

     Bernhard Wenger, Head of SPDR ETFs, Switzerland, SPDR ETFs

     Felix Niederer, Co-founder and CEO, True Wealth Bernhard Wenger, Head of SPDR ETFs, Switzerland, SPDR ETFs

       

    In discussion:

    • The rise of smart beta: With selectivity becoming more important, smart ETFs capturing factor exposures through systematic, rules-based approaches can add value in private client portfolios, although the complexity of these instruments, and their relatively short track record means due diligence is crucial.

    • Sustainable investing through ETFs: Sustainable ETFs greatly appeal to private investors’ emotions and values, and while these solutions lend themselves well to exclusionary screens, there is increasing demand for bespoke ETFs generating positive impact on the society and environment.

    • Gaining granular exposure on a sector basis: As correlations between sectors remain low, sector ETFs offering more granular exposure are particularly relevant in a late market cycle, and are easy to explain to clients, although risks may arise around index construction and liquidity

    • Finding value in fixed income ETFs: Fixed income ETFs are rapidly catching up with equities, with demand increasing for more country-specific solutions, although liquidity and client demand need to be taken into account before launching new products.

    • Addressing liquidity fears: There are growing fears that ETFs have not been fully stress tested and that liquidity may dry up in the event of a sustained sell-off , but the risk is higher for specific sector or thematic ETFs, while more conservative and safer structures are to be preferred

    PWM_Perspectives_Series_logo_RGB
    From Asset Allocation / ETFs November 16, 2018

    Demand for smarter, more sustainable ETFs on the up

    PWM travelled to the shores of Lake Geneva to meet prominent figures in the Swiss asset management and private banking space for a discussion on the latest exchange traded fund trends and developments, including demand for more dynamic strategies and growing interest in sustainable solutions 

    Martin Moloney, Central Bank of Ireland
    From Regulation April 26, 2018

    Regulators wrestle with rapidly expanding ETF industry

    As the exchange traded fund industry continues its record-breaking growth, are these investment vehicles sufficiently regulated?

    Jane Sloan, iShares
    From Asset Allocation / ETFs February 21, 2018

    Smart beta strategies start to gain traction

    The ETF industry is growing in size, with previously niche areas such as fixed income and smart beta reaching a wider audience than ever before

    State Street Perspectives

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