$2 trillion question: Why ETFs have failed to catch fire with UK platforms & advisers 10/02/2016 Exchange traded funds (ETFs) have been a monumental success since the first US listing in 1993. In 2005, there was US$425 billion AUM in ETFs globally – by August 2015, this had grown to over US$3 trillion. ETFs attracted net inflows of $372bn in 2015 alone. The pace of AUM growth as well as the pace of ETF product development has been blistering.
However, in the UK, the explosive growth of ETFs is limited predominately to the institutional arena. What we have not seen is the rapid adoption of ETFs in retail markets and among advisers as witnessed in the US. Many UK advisers remain entrenched in the use of active vehicles. This situation is even more curious when you consider S&P data that shows actively managed UK equity funds have routinely failed to beat their benchmark, with three-quarters of managers in this category underperforming over the past decade.