There are many exchange traded funds listed in Europe struggling for assets that may soon close down due to lack of investor interest and a tough market.
In a research note, Detlef Glow, head of Lipper EMEA Research, notes 241 out of 542 ETFs older than 3 years have attracted less than 100 million euros.
However, Glow does not believe the industry will consolidate to combine and weed out smaller products.
“ETFs do not only generate income from management fees,” Glow said. “Other income like creation and redemption fees need also to be taken into account to evaluate the profitability of an ETF.”
ETF providers may even be reluctant to relinquish their vanity fund products.
“In addition some of these ETFs have been launched for marketing reasons or to complete product ranges,” Glow added.