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BlackRock forecasts that assets in actively managed exchange traded funds will quadruple from $900bn to $4tn by 2030.
The projection from the world’s largest asset manager points to the rising investor demand for active management amid heightened market volatility as well as the appeal of the ETF wrapper.
“We believe the asset management industry is at an inflection point, where active ETFs are becoming an integral part of investor portfolios around the world,” wrote Stephen Cohen, chief product officer at BlackRock, and Rich Kushel, head of the portfolio management group.
“Investors are pivoting to active management and its specialist insights, differentiated strategies, and actively managed risk, [and] are increasingly turning to the ETF wrapper to access these strategies.
“This dynamic is giving rise to what we see as a new era of active ETF innovation,” they added.
The executives highlighted that, in the first half of this year, 41 per cent of global ETFs launched were active, compared with about a quarter in 2021.
Active ETFs are also comprising a larger share of industry net asset inflows, accounting for 22.4 per cent of ETF sales in the first half of the year and 21.4 per cent in 2023, up from 16.6 per cent in 2022, according to BlackRock.
“Given these trends, we expect global active ETF assets under management to reach $4tn by 2030 — more than a four-fold increase in about six years,” said the report.
BlackRock also highlighted the growth of active ETFs in Europe, the Middle East and Africa, where assets under management in such products are up 25 per cent at the end of last month compared with the end of 2023.
“We expect adoption to accelerate owing to changes in the investing landscape including the increasing adoption of ETFs overall, the rise of digital wealth platforms — empowering end investors, and the shift to fee-based investing and models,” according to the report.
*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.