ETF Trends
ETF Trends

BlackRock chairman and CEO Larry Fink recognizes that the exchange traded fund industry’s growth has been robust over the past 10 years. Investors of all types are using them and they are also proliferating on an international level.

Most of the success of the ETF industry has been due to innovation within the business, wrote Larry Fink on CityWire.

“This is evident in our own financial statements. BlackRock benefited in 2011 from the strong position we have in beta products, and the breadth of our global range of index funds and ETFs. We experienced a surge of new money into ETFs and index funds during Q4, with passive strategies gaining $45.3 billion in net inflows. For the year, iShares maintained its global leadership position and delivered net inflows of $53 billion,” he wrote.

Here are a few other points from Fink in the CityWire article:

  • Catalyst for Change: Investors around the world are stimulating the growth for the ETF industry. For instance, the retail distribution in the U.K. has been bringing ETFs to a larger customer base, while regulatory developments in the Netherlands and Australia are contributing to the demand.
  • Active Management: Both active and passive management are recognized as necessary investment styles.The ETF industry has potential for much more growth with the development of the active ETF space. Regulation is one the largest hurdles for this sector, and currently, BlackRock is working on these issues.
  • Regulation: Around the world, the ETF industry is in the midst of a large regulatory review. The exchange traded product industry has a huge future ahead, but most investors need to be educated on the risk and complexity of these tools.
  • Trends: Ongoing market volatility and key economic indicators may not show huge improvement, but the direction of global equity markets should be in an upward direction. The low growth, low interest rate environment is not going away, so investors need customized advice and risk-management products.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.