“We know the U.S. market’s been growing at 20 percent. We know that TETF Index has tracked this growth extremely well. That said, the U.S. market is way ahead. About 70 percent of the assets are there, but what we’ve seen this year is the international market pull ahead.” Guillermo Trias, Managing Partner & CEO
Clients will continue to favor ETFs
At Toroso we believe that in the next five years, the industry will hit $10 trillion in AUM, which is consistent with the 20 percent annualized growth that we’ve seen over the last 20 years.
The flows in the last year and a half have been primarily big institutions adopting low-cost beta and that’s usually the first wave. Institutions have really stayed away from ETFs until the last 18 months. “Now, they’ve really gone in heavy and they’ve started with the low-cost beta. Once they completely adopt that, they’ll start to realize those 2 in 20 hedge funds and other things that they’ve been doing can actually be done in a low-cost, transparent way”, says Mike Venuto, Co-founder and CIO for Toroso Investments. “Institutions are going to come from just owning the cheap beta into some thematics and multi factors over the next couple of years.”
Now, the key factor that could accelerate the growth of the industry beyond that 20 percent a year is a correction…
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