ETFs 2028: Shaping The Future

Global exchange-traded fund (ETF) assets under management (AuM) have achieved a remarkable compound annual growth rate (CAGR) of 18.9% in the past five years, reaching a new record of almost $11.5 trillion at the end of 2023, according to our new ‘ETFs 2028: Shaping The Future’ report. Our analysis also shows that the number of asset managers offering ETFs has doubled since 2013, with 60% of the top 100 asset managers now offering ETFs. The report highlights considerable opportunities asset managers have seen in the ETF segment over the past decade, which show no signs of abating. 

We surveyed more than 70 executives, over 80% of whom are ETF managers or sponsors, to uncover critical insights into ETF strategies and their implications for the asset management landscape. The survey results reflect heightened optimism among respondents about the continued growth and even greater opportunities for the global ETF market. For example, global ETF AuM is expected to exceed $19.2 trillion by June 2028, representing a five-year CAGR of 13.5%—more than double the anticipated 5% CAGR for the AWM industry in the five years up to 2027.

While traditional passive equity and fixed-income ETFs remain the predominant components of the global ETF AuM, ETF managers continue to innovate and diversify their product ranges. Survey respondents anticipate the trend of active ETFs to further accelerate in 2024 and beyond in all regions. Fixed income ETFs recorded a strong 24.4% year-on-year increase in 2023 and are expected to continue on this trajectory. Digital assets are also coming to the fore, with 20% of survey respondents expecting significant demand for bitcoin ETFs in the next two to three years. 

The report also notes that the growth opportunities arising from retail growth and the potential to tap into new investors in emerging markets will require ETF managers to employ a broader set of distribution channels, including digital, further invest in investor education and have an open mind to the use of partnerships to access new investor markets. The ability to deliver more personalised solutions will continue to be an important factor for investors.

Technology is expected to be critical in meeting increasing operational demands, cutting costs and sustaining returns. By leveraging the flexibility of cloud platforms, ETF managers can use disruptive technologies like AI, big data and blockchain to enhance investor engagement, gain deeper insights into their needs and expedite product development.