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Number of Strategic-Beta ETPs Rises at a Record Rate According to Morningstar Global Guide

Morningstar recently published the third annual Global Guide to Strategic-Beta Exchange-Traded Products, a global landscape report about trends in this space.

Morningstar’s global report provides an update on the state of the strategic-beta exchange-traded product (ETP) landscape, examining trends in growth, asset flows, product development, and fees. Key highlights include:

  • The number of strategic-beta ETPs in Morningstar’s database rose from 911 as of June 30, 2015 to 1,123, as of June 30, 2016. Worldwide assets rose from $519.2 billion to $550.5 billion during the same time period.
  • In Europe, assets rose from $32.5 billion to $40.7 billion, an increase of 25.4 percent.
  • In the 12 months to the end of June 2016, strategic-beta ETPs in Europe have boosted their market share to 7.5 percent from 6.3 percent, further extending the steady positive growth trend observed since 2009.
  • Fifty-eight new strategic-beta ETPs hit the European market in the past year; while the European strategic-beta menu continues to broaden, the majority of product development remains focused on equity strategies, with all but seven of the new strategic-beta ETPs launched over the past year tracking equity indexes.
  • Low-volatility/minimum variance ETPs have surged in popularity. As of the end of June 2016, there are 61 such ETPs worldwide, with collective assets under management of $47.5 billion.
  • iShares has further built on its dominance within the European strategic-beta ETP universe by growing its total market share by 7% to 44% in the year to the end of June 2016.
  • An increasingly crowded and competitive landscape will put pressure on fees. Cost-competition in this space will become more prominent in the years to come.