FTSE, the world’s third-largest equity ETF index provider, has seen its ETF-related assets under management (AUM) grow fivefold over the past three years, driven by the success of products such as iShares’ FTSE China A50 Fund ETFs, Vanguard’s All-World ex US Fund, and global real estate ETFs based on the FTSE EPRA/NAREIT Index.
Earlier this month, Vanguard announced that it will switch six international equity ETFs to FTSE benchmarks, replacing MSCI. The switch includes Vanguard’s Emerging Markets Stock Index Fund and its associated ETF (NYSEARCA:VWO), the world’s largest emerging markets ETF. With the transition, some $124bn in ETF assets are now indexed to FTSE benchmarks.
The new service unit brings together dedicated research and relationship management resources, who will work closely with clients to develop ETP index solutions across a variety of asset classes and geographies.
“As one of the world’s largest index providers, we are determined to significantly increase our share of the global ETP benchmark market,” says Mark Makepeace, CEO, FTSE Group. “The creation of FTSE’s new dedicated ETP Service Unit is the latest step in a strategy designed to deliver the best possible index and service solutions to our clients globally.”
The unit will be led by Jonathan Horton, President, FTSE North America. Supporting Jonathan will be New York-based Marc De Luise, Director of ETP Product Solutions, and Kristen Mierzwa, Director of ETP Relationships, North America. London-based Sudir Raju, assumes the role of Managing Director, ETP Relationships EMEA. A further appointment in the Asia-Pacific region will be announced shortly.
Global ETP assets have grown significantly in the last decade. Last year alone, exchange-traded products attracted net inflows of $163bn, significantly outpacing the $58.58bn in net new money going into traditional mutual funds.
FTSE believes that this growth will only accelerate as investors turn to ETPs in their search for low-cost, transparent diversification solutions. The steady proliferation of ETPs across alternative asset classes such as commodities and currencies underlines this trend, as does the growing number of alternative options to traditional cap-weighted indices.
Amongst the leading global index providers, FTSE was at the forefront in developing a range of non-market-cap weighted indices and is the leader in this market. PowerShares’ FTSE RAFI US 1000 ETF, one of the first of these products, has attracted more than $1.3bn in assets.