The mutual fund industry has been losing investor assets as market volatility pummeled fund assets and investor sentiment. Despite the market woes, the exchange traded fund business is still expanding, and investment management firm Legg Mason (LM) and other fund companies are taking notice.
Mark Fetting, CEO of Legg Mason, says he is “testing the waters” in the ETF space as he considers expanding into Europe and Asia, reports Jessica Toonkel for Reuters.
“We are looking to see if there are some niche areas as opposed to going aggressively into let’s say the commodity space, which I think is more of an oligopoly,” Fetting said in the Reuters article.
The investment company is looking to grow its business organically, or look for potential acquisitions in Europe and Asia to gain investment expertise and a foothold in the regions, Fetting added.
However, Fetting is concerned about the ETF business model, as the industry products have lower fees and lower profit margins.
“So the question of where the value for the shareholder is for us has to be asked alongside meeting emerging demand,” he said.