80% of asset management and wealth management firms state that AI will drive revenue growth, while the “technology-as-a-service” model could boost revenues by 12% by 2028, according to the Asset and Wealth Management 2024 report by PwC. A significant finding is that 73% of organizations believe AI will be the most transformative technology in the next two to three years.
The report reveals that 81% of asset managers are considering strategic alliances, consolidations, or mergers and acquisitions (M&A) to enhance their technological capabilities, innovate, expand into new markets, and democratize access to investment products, in a context marked by a significant wealth transfer. According to Albertha Charles, Global Asset & Wealth Management Leader at PwC UK, disruptive technologies, such as artificial intelligence (AI), are transforming the asset and wealth management industry by driving revenue growth, productivity, and efficiency.
“Market players are turning to strategic consolidation and partnerships to build technology-driven ecosystems, eliminate data management silos, and transform their service offerings amid a major wealth transfer, where affluent individuals and younger audiences will play a more significant role in shaping demand for services. To emerge as leaders in this new digital market, asset and wealth management organizations must invest in their technological transformation while ensuring they reskill and upskill their workforces with the necessary digital capabilities to remain competitive and innovative,” explains Charles.
This focus will be critical in addressing an industry whose assets under management are expected to reach $171 trillion by 2028. According to PwC projections, the sector will see a compound annual growth rate (CAGR) of 5.9%, compared to last year’s 5%. Notably, alternative assets stand out, expected to grow even faster with a CAGR of 6.7%, reaching $27.6 trillion during the same period.
“Despite the potential of alternative assets, only 18% of investment firms currently offer emerging asset classes, such as digital assets, though eight out of ten firms that do report an increase in capital inflows,” the report notes in its conclusions.
Key Trends
Taking into account this growth forecast and the role technology will play, PwC’s report identifies several trends. The first is that tokenization stands out as a key opportunity, with tokenized products projected to grow from $40 billion to over $317 billion by 2028, representing a CAGR of 51%.
Tokenization, or fractional ownership, can democratize finance by expanding market offerings and reducing costs. According to PwC, asset managers plan to offer tokenization primarily in private equity (53%), equities (46%), and hedge funds (44%).
Another identified trend is the consolidation and development of technology ecosystems while talent remains the top priority. In this context, 30% of asset managers report facing a lack of relevant skills and talent, while 73% see mergers and acquisitions as a key driver for accessing specialized talent in the coming years.
“The conclusions of this report highlight the urgent need for asset managers and firms to rethink their investment strategies. Their long-term viability will depend on a radical, fundamental, and ongoing reinvestment in how they create and deliver value. Strategic alliances and consolidation will play a vital role in creating technology ecosystems that facilitate greater exchange of ideas and knowledge. Smaller players will be able to modernize their systems quickly and cost-effectively, while larger players will gain access to critical talent and information for growth, particularly as new and emerging technologies like AI transform the investment management landscape,” says Albertha Charles, Global Asset & Wealth Management Leader at PwC UK.
To prepare the report, 264 asset managers and 257 institutional investors from 28 countries and territories were surveyed.
Celeste Boadas Joined Raymond James for Its Private Wealth Management Division in Coral Gables.
Boadas joins as a Client Service Associate “with a dedication to excellence in customer service and a passion for fostering meaningful relationships,” says the firm’s statement.
With experience in the international insurance industry since 2016, she comes from Insigneo, where she held customer service roles between 2020 and 2024.
She holds a Bachelor’s degree in Fine Arts from the Art Institutes and an MBA in Strategic Business Management from ADEN Business School, with a specialization from George Washington University. Celeste has earned the SIE and Series 7 designations, “underscoring her commitment to professional growth and excellence,” adds the firm’s statement.
“Celeste assists clients by addressing their needs and inquiries regarding investment accounts with professionalism and efficiency. She also plays a key role in onboarding and managing client relationships, ensuring that every interaction is seamless and enriching. Her personal and detail-oriented approach sets her apart, allowing her to build trust and deliver personalized solutions,” the statement continues.
The advisor, originally from Venezuela, is an active member of the Body & Brain community and a certified sound healing practitioner in Miami.
Additionally, she volunteers in programs that promote balance and personal growth through body and mind practices. In her free time, she enjoys wellness activities that reflect her holistic approach to life and work, the statement concludes.
Capital Group, one of the world’s largest asset managers, announced the launch of its first ETF designed to track U.S. small- and mid-cap stocks—a segment of the ETF market where new fund launches remain relatively rare, according to a Reuters report.
“The U.S. Small- and Mid-Cap ETF by Capital Group opens a new business opportunity. It was the last remaining product the company needed to launch to implement its own model portfolios before the end of the first quarter of 2025,” said Holly Framsted, Head of ETFs at the Los Angeles-based firm.
According to Capital Group data cited in the Reuters report and based on comments from Todd Sohn, ETF strategist at Strategas, of the more than $10 trillion in assets invested in U.S. ETFs, only about $440 billion is currently allocated to small-cap holdings.
“This remains a space within the ETF realm that is full of opportunities,” said Sohn.
Sohn explained that most investors gravitate toward active stock selection when choosing a small-cap fund. This is because indexes like the Russell 2000 include many unprofitable companies, making the index-linked funds less attractive.
However, it has only been five years since the U.S. Securities and Exchange Commission (SEC) opened the door to actively managed ETFs, and small-cap ETFs are still working to catch up.
Managing a small-cap equity ETF also presents unique challenges. Unlike mutual fund managers, no ETF can close its doors to new investors if managers believe the strategy cannot absorb additional capital.
Holly Framsted further explained that one reason Capital Group opted to combine small- and mid-cap stocks in the same ETF was to maximize the team’s ability to handle large inflows effectively.
Photo courtesyAitor Jauregui, Head of Latin America, BlackRock
Three trends have defined the past decade in the asset management industry*: large firms have grown even larger—with the top 20% managing 45.5% of total AUMs in 2023, up from 41% in 2013. Passive management is here to stay, representing 33.7% of assets under management compared to 14.3% in 2013. Finally, alternative assets, also known as private markets, now account for 10% of global AUMs.
Here are three additional data points for context: between 2013 and 2023, passive management AUMs grew at a compound annual growth rate (CAGR) of 14.7%, while alternative asset AUMs grew at 14%. Meanwhile, total AUMs grew by just 5.3% annually.
In 2009, BlackRock became the largest asset manager by AUM and has maintained that position for the past 14 years. The firm has adapted to industry changes, prioritizing passive management with iShares since acquiring the company in 2009 and launching alternative investments for the wealth segment in 2011. This commitment has only deepened in recent years.
What’s next? What is BlackRock doing to maintain its leadership? In an interview with Aitor Jauregui, BlackRock’s Head of Latin America, conducted from the firm’s Miami offices, we discuss the changing landscape of asset management, focusing specifically on how these shifts are impacting wealth management professionals in the markets he oversees: US Offshore and Latin America.
Changes in the Wealth Segment: The Shift to Fee-Based Models and the Rise of Model Portfolios
Aitor Jauregui highlights two key changes in the segment. The first is the rise of the fee-based model (where clients pay for advice rather than transactions) and the growing role of technology, which, he says, “go hand in hand.”
He backs this up with data: “In the US domestic market, the fee-based model accounts for 53% of managed assets; in Europe, it’s 42%. In Latin America, it’s just 20%, but this breaks down to 35% for US Offshore and only about 12% for Latin America.” For Jauregui, what’s important is that “in a business growing at double digits, the fee-based segment is also growing at double digits. In US Offshore, the fee-based market has grown from 20% to its current 35%, and much of this shift from brokerage to fee-based is explained by the growing role of model portfolios.”
Model Portfolios and Technology: A Symbiotic Relationship
The growth of model portfolios has been driven by technology over the past two years. BlackRock has positioned itself as a leading provider of these portfolios for RIAs and fintechs in the offshore and Latin American markets, outpacing competitors.
“In 2024, 25% of BlackRock’s ETF flows in the offshore market came from model portfolios. In 2021, a year of strong ETF growth, only 3% came from model portfolios. This speaks volumes about the increasing adoption of model portfolios in this market,” Jauregui explains.
While BlackRock’s initial success in model portfolios was primarily supported by its iShares ETFs, the firm is now working to incorporate technological solutions that include alternative assets. “Through our partnership with Partners Group, we are developing solutions—currently only available in the US domestic market—that allow model portfolios to combine public and private assets, including BlackRock products,” Jauregui notes. While these solutions aren’t yet available offshore, their existence underscores the feasibility of integrating private assets into model portfolios, provided infrastructure challenges—like automating rebalancing for semi-liquid private assets—are addressed. “Evergreen solutions are increasingly common among private credit funds, which is the type of alternative asset we see the most demand for from our wealth clients.”
BlackRock Embraces the Rise of Active ETFs
A direct result of technology’s growing role is the ability to segment wealth clients and serve individuals with much smaller investable assets. Advisors in the ‘mass affluent’ segment, catering to non-US residents with investable assets between $500,000 and $3 million, can now efficiently serve clients primarily through model portfolios.
“In this segment, we are witnessing the rise of active ETFs. These products offer the benefits of active management with specific tracking error objectives, packaged in an ETF that provides transparency, liquidity, and cost efficiency.”
Currently, iShares offers eight active ETFs in UCITS format, all launched last year. “By 2025, we plan to continue providing solutions to our clients through active ETF vehicles, including systematic strategies in ETF format. We also anticipate greater innovation in iBonds, defined-maturity bond ETFs,” Jauregui concludes regarding future launches.
Private Markets: Inorganic Growth for Long-Term Goals
The past year has been eventful for BlackRock’s alternative asset unit. In January, the firm announced the acquisition of GIP, integrated on October 1, to expand in the infrastructure segment—a sector that globally requires significant investment beyond what governments can finance, opening the door to private investors. “Infrastructure includes not just ports, airports, and roads but also everything related to digitalization and artificial intelligence,” Jauregui points out.
One concrete initiative is the GAIIP partnership between BlackRock, GIP, Microsoft, and MGX—an Emirati sovereign technology fund—to invest up to $100 billion in infrastructure supporting data centers and their associated alternative energy sources, driven by the growing demand for AI.
In 2024, BlackRock also announced the acquisition of Preqin, a market intelligence leader for alternative assets. “We firmly believe in the need to continue investing in data analytics to bring greater transparency to private markets,” says Jauregui. He explains that Preqin, along with eFront (acquired in 2019), complements Aladdin, BlackRock’s public markets risk management software, by providing a private markets risk management solution.
The firm’s latest acquisition in alternatives is the private credit platform HPS Investment Partners, announced in December. Closely tied to the need for new energy and infrastructure is the need for new financing sources for the future. “Direct lending strategies will become increasingly important; both our institutional and wealth clients express significant appetite for opportunities in infrastructure and private credit,” Jauregui adds.
*Data from ‘The world’s largest 500 asset managers’ Thinking Ahead Institute and Pensions & Investments joint study | October 2024.
Bitwise Asset Management and VettiFi’s annual “Benchmark Survey of Financial Advisor Attitudes Towards Crypto Assets” showcased increased interest and the adoption of cryptocurrencies among financial advisors.
The survey followed a year marked by the approval of spot Bitcoin and Ethereum ETFs. Results showed that 56% of advisors are more likely to invest in crypto in 2025 due to the 2024 U.S. elections. Crypto allocation rates reached 22%, doubling from 2023 and marking the highest rate recorded in the survey’s history.
Client interest also remained high, with 96% of advisors reporting inquiries about crypto. Among advisors already allocating to crypto, 99% plan to maintain or increase exposure in 2025. Advisors who have not yet been assigned are showing more interest, with 19% considering investments, compared to 8% last year.
“But perhaps most staggering is how much room we still have to run, with two-thirds of all financial advisors -who advise millions of Americans and manage trillions in assets – still unable to access crypto for clients,” said Matt Hougan, Bitcoin CIO.
Despite these trends, access remains a barrier, with only 35% of advisors able to buy crypto in clients’ accounts. Additionally, 71% of advisors reported clients investing independently, presenting potential opportunities for wealth management services.
Survey respondents included over 400 financial professionals, spanning RIAs, broker-dealers, and wirehouses.
“Based on the latest data, the future is very bright as advisors and investors gain more access and education about the potential benefits,” said Todd Rosenbluth, Head of Research for TMX VettaFi
Family offices in the Americas are observing growing differences in priorities and approaches between founders and the next generation, according to new research by Ocorian.
The study, conducted among family office professionals in the United States, Canada, Bermuda, and the Cayman Islands, who collectively manage around $32.8 billion in assets, found that 93% point to generational differences within their families, and 33% consider these differences to be significant.
The biggest area of difference, identified by 68% of respondents, is investment in digital assets, while 52% highlight differences in ESG and impact investing. Approximately half mention discrepancies in the approach to private markets, while asset allocation and investment strategy are controversial topics for 34%.
These differences in approaches and priorities are driving a greater focus on succession planning, with all executives surveyed stating that more work is needed in this area.
93% report that there is a natural succession of wealth and leadership in the family offices for which they work.
On the other hand, 92% highlight that ensuring proper governance to meet the needs and expectations of family members is the biggest challenge they face.
The research also revealed that 77% say their family offices have become more professional in terms of operations and structure over the past five years. The remaining 23% state that their family office was already professional.
One important area of professionalization highlighted in the study is the strengthening or introduction of a family constitution, noted by 62% of respondents. More than half (54%) indicated that increased support from external providers has helped professionalize their family offices.
Ocorian is a global provider specializing in services for high-net-worth individuals and family offices, financial institutions, asset managers, and corporations, with a dedicated team to support family offices.
The latest data on the U.S. labor market, published last Friday, marked a turning point for assessing how the year has begun. It also serves as an opportunity to adjust some of the 2025 forecasts released by international asset managers.
The main takeaway from experts is that this latest data rules out an interest rate cut in January—the Fed meeting will take place on January 28–29. Meanwhile, markets have even begun shifting expectations for new cuts to the second half of the year. “Despite strong demand, wages did not respond to the increased labor market activity, as they rose by 0.3% compared to the previous month, the same as in November, and the year-on-year measure even fell to 3.9% from 4.0%. This aligns with central bankers’ assessment that, for now, there are no additional inflationary pressures coming from labor markets, and it is unlikely they will intensify their recent hawkish tone,” explains Christian Scherrmann, Chief U.S. Economist at DWS.
“With no clear signs of weakening, we suspect that the Fed will be happy to pause its easing cycle at its upcoming January meeting, as broadly indicated in December. We remain of the view that the Fed will make only one cut this year, and while we still foresee it happening in March, we acknowledge that the Fed will be data-dependent. However, we expect the Fed to resume rate cuts in 2026 as a result of the net negative impact on growth that we believe will stem from the new administration’s unorthodox economic programs,” argues David Page, Head of Macro Research at AXA IM.
It is clear that a more aggressive Fed impacts the outlook of international asset managers, but it is not the only thing that has changed as the year has begun. According to Fidelity International, there has been a widespread improvement in earnings revisions across most regions. However, in their view, two aspects remain unchanged compared to this year: “We expect U.S. exceptionalism to continue for now, driven by upcoming tax cuts and deregulation policies, which is why we maintain our preference for U.S. equities. At the same time, we still see a high political risk. Trade war risks have increased, while the likelihood of a peace agreement between Russia and Ukraine has grown,” they state.
For Jared Franz, an economist at Capital Group, the U.S. economy is experiencing the same phenomenon depicted in the movie The Curious Case of Benjamin Button (2008). “The U.S. economy is evolving similarly. Instead of advancing through the typical four-stage economic cycle that has characterized the post-World War II era, the economy seems to be moving from the final stage of the cycle to the mid-cycle, thereby avoiding a recession. Looking ahead, I believe the United States is heading toward a multi-year period of expansion and could avoid a recession until 2028,” he says.
Historically, and according to Capital Group’s analysis of economic cycles and returns since 1973, the mid-cycle phase has provided a favorable context for U.S. equities, with an average annual return of 14%.
Implications for Investors
According to Jack Janasiewicz, Chief Strategist and Portfolio Manager at Natixis Investment Managers Solutions, his outlook for the year can be summarized as U.S. stocks rising and bonds falling in 2025. “As we enter the new year, the labor market seems to be in recovery mode, as inflation continues to decline, contributing to higher real wages. This translates into greater purchasing power for U.S. consumers. Since consumption drives most of the growth in the U.S., this is a very healthy scenario. Looking ahead to 2025, our outlook remains positive, with expectations of even slower inflation and an expanding labor market. Investment strategies are likely to favor U.S. equities with a balanced investment approach and the use of Treasury bonds to mitigate risk. We foresee that new investments in artificial intelligence will continue to drive productivity and economic growth. The stock market is expected to maintain its upward trend, while the bond market will earn its coupon,” highlights Janasiewicz.
Fixed Income: Focus on Treasuries
One of the most notable movements in these early weeks of January is that the yield on U.S. Treasuries is approaching 5%. According to Danny Zaid, manager at TwentyFour Asset Management (a Vontobel boutique), last Friday’s U.S. unemployment data provides a strong argument for the Fed to remain patient regarding the possibility of further rate cuts. “This has caused a significant increase in U.S. Treasury yields in recent weeks, as the market is lowering expectations for additional cuts. Moreover, rates have also been pushed higher due to market uncertainty about the extent of the new Trump administration’s policy implementation, particularly concerning tariffs and immigration, which could have an inflationary impact,” notes Zaid.
Analysts at Portocolom add that another notable development was that, for the first time in over a year, the 30-year bond exceeded a 5% yield. “European debt experienced virtually identical behavior, with both the Bund and the 10-year bond gaining 15 basis points, closing at 2.57% and 3.26%, respectively,” they point out.
Among the outlooks from the manager at TwentyFour AM, he considers it likely that 10-year U.S. Treasuries will reach 5%. “However, if we take a medium-term view, yield levels are likely to become attractive at these levels. But we believe that for there to be a significant rally in U.S. Treasuries, at least in the short term, we would need to see data pointing to economic weakness or further deterioration in the labor market, and currently, neither condition is present. The rate movements, while significant, are largely justified given the current economic context,” he argues.
The increase in sovereign bond yields has also been observed in the United Kingdom. Specifically, last week saw the largest rise in bond yields, with 10-year Gilts reaching an intraday high of 4.9%, a level not seen since 2008. “Although specific U.K. factors, such as the budget, contributed to the rise, most of the increase was due to the rise in U.S. Treasury yields during the same period. Both weaker growth and higher interest rates put pressure on public finances. Unlike most other major developed countries, the U.K. borrows money at a much higher interest rate than its underlying economic growth rate, worsening its debt dynamics. If current trends of rising yields and slowing growth persist, the likelihood of spending cuts or tax hikes will increase for the government to meet its new fiscal rules,” explains Peder Beck-Friis, an economist at PIMCO.
Equities
As for equities, the year began with the stock market facing a correction that, according to experts, is far from alarming and seems like a logical adjustment after a strong 2024 in terms of earnings. “This data has dispelled fears of an imminent recession but has also ruled out the possibility of rate cuts by the Federal Reserve in the short term, a factor that has pressured major indices like the S&P 500 and Nasdaq, which have fallen around 1.5%. This correction seems to reflect a normal adjustment in valuations rather than a deterioration in economic fundamentals. Credit spreads become a key indicator for interpreting this environment, as long as they remain stable, the market is simply adjusting after a period of rapid gains. Only if we see a widening of these spreads could it signal the first sign of growing concerns about economic growth,” says Javier Molina, Senior Market Analyst at eToro.
In this context, Molina acknowledges that the upcoming earnings season, starting this week, is generating high expectations. “An 8% year-over-year growth in S&P 500 earnings is anticipated, one of the highest levels since 2021. Sectors such as technology and communication services are leading the forecasts, with expected growth of 18% and 19%, respectively. In contrast, the energy sector faces a sharp contraction in earnings, reflecting the challenges of this environment,” he says.
According to the investment team at Portocolom, their assessment of the first weeks is very clear: “The first week of the year in equity markets was characterized by the opposite movement between Europe and the U.S. While U.S. indices fell 2% (the S&P 500 closed at 5,827.04 points and the Nasdaq 100 at 20,847.58 points), in Europe we saw gains exceeding 2% for the Euro Stoxx 50 and 0.60% for the Ibex 35, which ended the week at 4,977.26 and 11,720.90 points, respectively. The performance of a key benchmark, the VIX, was also noteworthy, as the volatility index rose by more than 8% during the week, adding tension to the markets, particularly in the U.S.”
For the Chief Strategist and Portfolio Manager at Natixis Investment Managers Solutions, earnings growth and multiple expansion were the biggest drivers of U.S. equity market returns during 2024. Looking ahead to 2025, Janasiewicz points out: “While some may argue that valuations are at exaggerated levels, we believe these valuations may be justified by the fact that U.S. corporate margins are at historic highs, and investors are willing to pay more for higher-quality companies with stronger margins. Moreover, risk appetite does not appear to be very high, as many investors seem content to remain in money market funds earning 5%, hesitant to jump into equities, which would push prices even higher.”
Lynne Westbrook Joins Ocorian as Fund Services Director in Dallas
Lynne Westbrook has joined Ocorian as Director of Fund Services in Dallas.
The firm’s new hire aligns with its U.S. expansion strategy following the acquisition of EdgePoint Fund Services, according to a statement accessed by Funds Society.
Westbrook will lead and manage the Fund Services business in Dallas, with responsibility for delivering operational services and maintaining local relationships with clients and intermediaries.
Prior to joining Ocorian, Westbrook served as Director of Private Markets at Aztec Group, and previously worked in the UK at JP Morgan, as well as holding roles at LoneStar and SS&C. Her more than 20 years of experience includes specialized expertise in accounting and financial reporting, working with private equity funds, supporting Limited Partners (LPs), and managing fund administration, the firm’s statement adds.
“Lynne’s experience supporting both global and U.S. managers across private asset classes will be a significant contribution as we continue expanding our presence in the U.S.,” said Yegor Lanovenko, Co-Head of Global Fund Services at Ocorian.
The cross-border real estate investment firm, White Bridge Capital, continues its expansion focused on the services requested by its clients, family offices managing UHNW wealth. As part of this strategy, the firm announced the hiring of Ford von Weise as the new Head of Aircraft Advisory and Finance.
“We are thrilled to welcome Ford von Weise as the new Head of Aircraft Advisory and Finance at White Bridge Capital!” posted one of the firm’s founding partners, Tommy Campbell Supervielle.
Von Weise will lead the Aircraft Advisory and Finance team, focusing on advising on aircraft acquisitions, conducting market analyses, and optimizing financing strategies.
The new hire brings more than 30 years of experience in the aircraft business, including leadership roles at Citi Private Bank, Merrill Lynch Capital, and GMAC Commercial Finance.
He is a commercial pilot with over 2,500 hours and an aviation expert, according to the post by the firm’s founding partner.
“Ford has a proven track record of delivering customized aviation solutions to high-net-worth clients worldwide,” he added.
In the past, ETFs were synonymous with equity tracking instruments. Ten years after WisdomTree’s launch in Europe, the adoption of this asset type (or wrapper) has opened a new frontier in investing for clients of all profiles. Over the decade since we entered the European market, the ETF landscape has radically changed in terms of available products, assets under management (AUM), and ETF users.
Many European clients who, years ago, were buying an ETF for the first time are now firm believers in this asset type. In fact, many have replaced their mutual fund holdings with ETFs due to the transparency, liquidity, and exposure they can access through this cost-effective wrapper.
ETFs have also moved past their reputation as passive vehicles. We never pigeonholed them that way because we always believed investors needed more innovative solutions than market capitalization-weighted indices. This led us to pioneer the launch of ETFs that invest in systematic strategies based on fundamentals.
Their ability to encompass all types of investment strategies is just one of the reasons why ETFs have done more to level the playing field for investors than any other innovation in asset management. One of their effects in recent years has been their adoption by retail clients, which has accelerated across the region. While there is still room to catch up with the U.S. market, this trend represents an exciting growth opportunity for ETF issuers in Europe.
And it’s not just individual investors benefiting from ETFs. Private banks, high-net-worth individuals, and financial advisory firms can also access institutional-quality products in a direct, cost-effective, transparent, and liquid manner, truly transforming their client offerings in ways previously unattainable.
ETF users today are more curious and open-minded than they were 10 years ago, when these products were mainly used for large-cap equity allocations. At that time, few believed that non-market-cap-weighted exposures could be viable investment options in an ETF. The world now understands that these products are highly efficient, which is another reason why, according to our latest survey of professional investors, nearly all of them invest in ETFs. This point is reinforced by the fact that nearly half expect to increase their allocations in the next 12 months.
The Potential of ETFs
There is no doubt that ETFs have become essential for asset allocators. While most ETF assets are invested in products tracking traditional benchmark indices, investors are increasingly seeking access to a wider range of asset classes through these strategies. More than one-third (35%) of professional investors use ETFs to access alternative asset classes, including commodities and cryptocurrencies. This marks a significant shift from earlier skepticism about the viability of non-equity exposures in an ETF.
To understand the impact of these products, one must consider the global adoption of cryptocurrency ETPs. This innovation has bridged the gap between traditional finance and this emerging asset class, as evidenced by the $20 billion that has flowed into bitcoin ETPs this year. Turning bitcoin into an exchange-traded product democratized access to the world’s largest cryptocurrency. It has succeeded because bitcoin adds something different to portfolios, and there are fewer barriers to entry—most European investors can now buy a cryptocurrency ETP.
The Next Chapter: Smart Innovation in ETFs
Innovation focuses on enhancing portfolio value, and the demand for it is undeniable. According to our survey, 98% of European professional investors are seeking greater product innovation. Additionally, 25% identify the development of innovative products as the key trend that will drive ETF growth in Europe over the next decade. This perspective strengthens our belief that ETFs are the ideal platform for delivering innovation to investors—a commitment we have honored from the outset.
The past decade has shown us that ETFs have a promising future. This will translate into greater adoption, more options for investors, and continuous innovation from issuers, who must adapt to evolving client needs. Failure to innovate can be costly. The future of ETFs is immensely promising, and I am confident that smart ETF innovation will shape a bright future for both the industry and investors.
