by Detlef Glow.
On July 3, 2019, Refinitiv launched “The Refinitiv ETF Academy”, a new annual conference held in London. The conference was linked to the annual “Lipper Fund Selectors Forum,” which is a staple on many agendas in the U.K. fund industry. Even as it was the first ETF Academy, the list of speakers and panelists were full of well-known experts from all over Europe.
The event started with a presentation on the European ETF landscape during which Detlef Glow, head of Lipper EMEA research at Refinitiv, gave an overview on the assets under management in the European ETF industry and current flow trends. He also discussed some of the factors that drove the trends in different asset classes.
After this Andrew Walsh, Executive Director, Head Passive & ETF Specialist Sales – U.K. & Ireland at UBS AM, asked in his presentation the question: “Are you making the most of Passive Investing?
How does index selection impact your returns?” Within this presentation, Walsh pointed out that there are, in some cases, big differences between indices from the same asset class, i.e. equity Europe, or the same asset type, i.e. commodities, that can potentially have far more impact on the annual returns of a passive investor than the difference in expense ratios between ETFs.
These presentations were followed by the panel discussion, “Is ESG Investing Only Accessible through Active Management?” During the discussion, Walsh, Wouter Bakker, CFA, ETF Client Portfolio Manager at Candriam, and Jean-Maurice Ladure, Executive Director and Head of Equity Applied Research, EMEA at MSCI, examined with moderator Glow whether the argument that ESG investing can only favor active fund managers—who can make decisions and lobby boards as part of their investment process—was right or not. The panelists came to the conclusion that ESG investing is not an area where only active managers can achieve their objectives, as passive investors are not as passive as critiques state. For example, passive investors have, in general, policies to use their voting rights and conduct, in some cases extensive, research with regard to the ESG factors on the companies in their investment universe.
In the next presentation, Nik Bienkowski, co-CEO and co-founder of HANetf, took over the stage for “ETFs in Europe – Launching, Competing and Winning – What Traditional Managers Need to Know.” Bienkowski pointed out that creating an ETF offering is high priority for most asset managers, but he also made clear that it is easier said than done. He also examined why asset managers can’t afford to miss the opportunity that ETFs offer, showed the impediments to success, and the strategies needed to win. Bienkowski summarized that it is still not too late for fund providers to formulate their own ETF strategies if they don’t already have one. Even if the strategy is “do nothing now,” it is better than nothing, he said.
The Refinitiv ETF Academy was closed by the panel discussion, moderated by Glow, called “From Plain Vanilla Passive via Smart Beta to Active.” Marlène Hassine, Head of Lyxor ETF research at Lyxor ETF, Michael John Lytle, CEO of Tabula Investment Management, Jürgen Blumberg, Head of ETF Capital Markets EMEA at Goldman Sachs Asset Management, and Thomas Merz, Head of Distribution Europe (ex-U.K.) at Vanguard Investments, shed a spotlight on the evolution of the ETF industry. The panelists discussed how the European ETF industry enables investors nowadays to invest in mainly every liquid asset type after starting as an offering based on plain vanilla equity indices. The panelists also provided their thoughts on the upcoming developments in the ETF industry, in which they made clear ETFs domiciled in Europe will become even more innovative because there are still white spots on the investment map which need to be covered since investors are looking for new and innovative products that enable them to achieve their investment goals.
The views expressed are the views of the author, not necessarily those of Lipper or Refinitiv.