1) Digital Engagement Drives Asset Manager Firm Selection by Advisors, J.D. Power Finds Business Wire | 11/21/2019
Because… The J.D. Power study underlined the importance of digital communication. One of the survey results shows that 66% of advisors who indicate high levels of digital engagement with an asset manager say they are very likely to increase their investment with that asset manager. Many firms currently realize that social media platforms can offer outreach opportunities, but they have not fully dedicated to the cause of helping advisors take advantage of digital tools to build a larger client base. To strengthen their relationships with the advisor community, fund companies can show advisors how to develop a unique personality in the digital world to stand out from the pack and generate more investor attention. Firms should also familiarize advisors with compliance management software so that they can keep up with regulatory changes.
2) ETF Inflows on Track for 2nd-Largest Year ETF.com | 12/2/2019
Because… According to ETF.com data, BlackRock’s iShares ETFs raised $16.1 billion and Vanguard ETFs collected $12.6 billion in November, which brought their YTD inflows to $96.9 billion and $89.5 billion, respectively. Net flows into these two providers accounted for 75% of November sales and 71% of YTD sales. Among this year’s top 10 gainers, Vanguard took four spots and BlackRock had six. Flow data indicates these two industry leaders have maintained their strong grip despite the keen competition. While the removal of exemptive relief makes the product launch easier and the approval of actively managed non-transparent ETFs will spur the introduction of active ETFs, we do not expect new products to weaken BlackRock and Vanguard’s dominance in the ETF industry anytime soon.
3) Multifactor ETFs Shining as Intended ETF.com | 12/3/2019
Because… Multifactor has remained to be the second largest smart beta ETF group with assets of $85.6 billion as of September 2019, based on FUSE’s classification. Though Multifactor was not the smart beta investment focus with the fastest asset growth, its asset increase of 25.3% from year-end 2018 was larger than the 19.4% increase for Dividend ETFs, the largest smart beta ETF group. In fact, assets in Multifactor ETFs grew faster than those in Dividend ETFs in each of three years from 2015 to 2018. Since 2016, Multifactor ETFs posted more net inflows every year than Dividend ETFs. For example, Multifactor ETFs garnered $13.6 billion in 2017, more than doubling the $5.3 billion flows into Dividend ETFs. The sales gap became wider in 2018 when Multifactor ETFs raked in $15.3 billion, compared with net redemptions of $3.1 billion from Dividend ETFs.