The global ETF industry is expected to maintain its phenomenal growth rate with assets under management forecast to double over the next four years, according to professional services firm PwC.
Professional services firm PwC forecasts AUM in the global ETF industry to reach $20 trillion by 2026.
In a new report entitled ETFs 2026: The next big leap, PwC states that AUM in the global ETF industry could reach the $20 trillion milestone by 2026.
The ETF industry recorded total assets of $10.27 trillion at the end of 2021, according to data from London-based ETF industry consultant ETFGI.
Based on these figures, PwC’s forecast for 2026 represents a compound annual growth rate (CAGR) of 18.1% over the next four years.
While the expected growth rate is impressive, it is actually slightly below the industry’s current rate of expansion which has averaged 22% per annum over the past five years.
As part of the report, PwC carried out a survey of 60 ETF industry executives collectively accounting for over 80% of ETF assets worldwide. The study found similar bullishness amongst these respondents who see the industry continuing to attract robust inflows as well as draw in a raft of new entrants, innovative products, and distribution opportunities.
According to the survey, most global executives highlight thematic ETFs, active ETFs, and crypto ETFs as the segments with the greatest potential to fuel demand over the next four years.
Additionally, due to a growing body of investors, regulators, and societal stakeholders demanding sustainability considerations be embedded in the global financial landscape, 45% of respondents expect that more than half of their product launches in the coming years will be ESG-focused.
Finally, when asked to gauge demand from different market segments and access points, online platforms, financial advisers, and retail investors came out on top. The executives also see expansion into new markets as the other main opportunity to build scale and market reach with many survey participants signaling their desire to tap the Asia-Pacific and Latin America regions.