Global X ETFs expands into Europe

Darren Sinden

The high costs and unexciting returns offered by many actively managed products have made passively managed ETFs a growth market in the UK and Europe over recent years

ETF markets in Europe can look forward to welcoming a new participant in the coming weeks as New York-based Global X ETFs has announced its intention to cross the Atlantic and add to the geographic foot parent of its Korean parent Mirae Asset Global Investments who distribute ETFs across Asia the Americas.

Global X ETFs has made two senior appointments to help run the new European operations with Rob Oliver joining as head of business development in Europe.

Mr Oliver was formerly the head of beta and systematic strategies at JP Morgan Wealth Management. He will be joined by the head of research Morgane Delledonne who was recruited from BMO Global Asset Management where she acted as an ETF specialist

Luis Berruga the CEO of Global X believes that Europe remains an attractive proposition for ETF issuers as it is the second-largest market in the world for Exchange Traded products after the USA.

Mr Berruga said that “Europe has seen significant growth in the last few years and we expect that to accelerate over the next five to 10 years. There are the same dynamics for adoption (of ETFs) as in the US, such as lower cost and increased transparency”

Global X will look to expand its European team further before issuing its first ETF on the European market prior the end of December.

Global X currently manages almost 80 ETFs, many of which track specific and often topical themes such as robotics and artificial intelligence, cloud computing, telemedicine and the internet of things. It also offers a wide range of international focused funds such as China Consumer Discretionary or China Utilities.

In total, the firms ETFs have approximately $18.80 billion in assets under management (AUM), the largest of the funds it manages accounts for $2.20 billion of that total figure.

Global X is the latest in a series of US ETF providers who have set their sights on Europe, however not all US providers have been happy to meet European regulatory requirements such as producing key information documents (KIDs) and risk-reward scenarios for their individual funds, without which it can be very difficult for European private investors to own the funds.

The high costs and unexciting returns offered by many actively managed products have made passively managed ETFs a growth market in the UK and Europe over recent years, and more than $74.0 billion flowed into European listed ETF and ETPs in the first ten months of 2020, although that figure was lower than the comparable number in 2019, which came in at $88.0 billion.

Total assets invested in European listed exchange-traded products are estimated to be in the order of $1.10 trillion a sum that is sizeable enough to tempt more overseas providers into the European market place.

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