ETFs
DWS plans to boost its active ETF business
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DWS is looking to grow its active exchange-traded fund business in Europe to stay “ahead of the curve” as a number of asset managers enter the space looking to capitalise on demand.
Dirk Goergen, global head of client coverage, said active ETFs had not been a major focus area for the firm in Europe, but there was growing demand from clients for such products that they wanted to take advantage of.
US-based Goergen said active ETFs played a “vital role” in the US market and the trend was likely to “spill over” to Europe.
“We are always very attentive and closely monitoring the trends that are occurring in the U.S. market,” Goergen said.
This article was previously published by Set Europe on firea title belonging to the FT group.
“THE [passive] The game also started earlier in the US and then spread to Europe, so it is likely that active ETFs will spread to Europe as well.
According to ETFGI data, actively managed ETFs listed globally saw net inflows of $125.1 billion in the first five months of 2024. The majority of this activity was in the United States.
According to Morningstar, DWS currently manages nine active ETF products in Europe within its Xtrackers business.
“We launched active ETFs [in Europe] “It’s been a while now, but we haven’t really focused on them,” Goergen said.
However, he said DWS had the internal “capabilities” to expand.
“First of all, you have to be a strong player in the ETF space, then have an active platform. We manage 300 billion euros of passive management. [and] around 500 billion euros on the active site. For us, it is a natural thing to combine these forces.
“[Active ETFs] “It’s something the team is focused on and we’re going to execute on, just to stay ahead of the curve.”
Goergen said new products were being manufactured, but exact numbers and timelines had not yet been confirmed.
DWS’s stance on active ETFs contrasts with that of its closest rival Amundi, which said it has no intention of meeting the growing demand for actively managed ETFs.
Vanguard, American giant of passive management also resisted pressure to launch active ETFs in Europe, while other firms including BlackRock, Franklin Templeton and Axa Investment Managers have entered the space.
Assets under management by active ETFs in Europe have doubled over the past three years, but they still represent only a small proportion of total assets under management in the region.
European active ETFs had total assets under management of €38 billion at the end of April, according to Morningstar data.
Goergen also said DWS was looking to expand and diversify its alternatives business, having set up a capital solutions unit earlier this year to expand its capabilities in direct lending, leveraged lending and structured credit.
Acknowledging that last year had been a “very difficult” environment in which to operate, he said he was “optimistic” about the group’s performance.
DWS was gaining market share through Xtrackers and focusing on developing new capabilities, such as crypto ETFs and stablecoins, according to Goergen.
*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.