BOOST ETP predicts radical change in the ETP sector at the APCIMS ‘ETFs & ETPs - the next generation’ conference
Friday 11th January '13
- Consolidation will be a key feature in the ETP market in 2013
- Business models will change due to regulatory pressures – the bank ‘silo model’ will disappear
- Specialist players will emerge
Hector McNeil, Co-CEO of BOOST ETP (BOOST), the independent exchange traded product (ETP) provider, today forecast substantial structural change within the ETP industry at the APCIMS’s conference entitled ‘ETFs & ETPs - the next generation’ held today. Mr McNeil presented to a room of over 100 delegates looking at how the ETP sector is changing and its effects.
Hector McNeil, Co-CEO of BOOST commented: “These are exciting times for the European ETP industry where significant and radical change is expected and indeed anticipated. We will continue to see strong asset growth into ETPs alongside major structural changes, which includes industry consolidation, both in terms of the number of providers but also the number of products.”
BOOST expects that the largest EU institutional asset manager players will subsume the medium sized issuers, taking out competition and also increasing their market share considerably. These large players will continue to dominate the markets both domestically and globally, especially given the price compression seen in the plain vanilla products. Smaller independent issuers will find the main opportunities in specialised, value added areas, such as short and leveraged products, Vix, commodity and other innovative products.
“I have been forecasting for some time that, in particular, many banks would exit the ETF market due to increased regulation and revenue pressure on their ‘silo provider’ model,” McNeil added. “We believe that the BlackRock acquisition of Credit Suisse’s ETF business will be just the start of this consolidation and that we are likely to see a 30% reduction in the numbers of ETF providers in Europe.”
Also presenting at the seminar were Peel Hunt, the independent and full-service broking and advisory business speaking about ETF flows and market trends, and also NASDAQ speaking about the investment outlook for 2013.
Frank Hatheway, Chief Economist at NASDAQ commented, “ETPs are well positioned for a strong 2013. They give investors unrivaled choice and flexibility in responding to an investment environment highly dependent on upcoming central bank actions.”
Steven Fine, Managing Partner at Peel Hunt commented, “ETPs have seen meaningful inflows in 2012 as they provide a consistent and liquid way to gain exposure to a wide range of securities. This is particularly noticeable in fixed income instruments. We have seen interest in bond ETPs increase almost 30% year over year.”