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The ETF market size is forecast to increase by USD 13.12 billion, at a CAGR of 17.61% between 2023 and 2028. The Equity, Fixed Income, Real Estate, Commodity, and Currency Exchange-Traded Funds (ETFs) market is experiencing significant growth, with increasing Assets under Management (AuM) and market liquidity. The trend toward bond ETFs continues, driven by their cost-effective nature and ability to offer investors access to diversified portfolios. However, this growth brings challenges, including transaction risks and the need for advanced Investment Accounting solutions, such as Contingency Net Asset Value (NAV) solutions, to ensure accurate and timely pricing for various ETFs, including Topix Equity ETFs, Fixed Income ETFs, Real Estate ETFs, Commodity ETFs, and Currency ETFs. These advanced solutions help mitigate risks and ensure regulatory compliance, enabling investors to make informed decisions in the dynamic market.
Exchange Traded Funds (ETFs) are a type of investment fund that functions as an exchange-traded product. They are listed on stock exchanges and allow investors to buy and sell units like stocks. ETFs provide the benefits of mutual funds, such as diversification and professional management, but with the added flexibility of being bought and sold throughout the trading day. ETFs offer affordability and lower transaction costs compared to mutual funds due to their structure. They track various indices, making them an excellent choice for passive investment strategies. Government support and financial market stability have contributed to the growth of the market. ETFs come in various forms, including physical ETFs, alternative trading funds, computer-built ETFs, and those focused on specific sectors like fixed income, real estate, commodities, and currencies. ETFs can be suitable for both retail and institutional investors, as well as individuals seeking to invest in bonds, equities, commodities, or currencies. With their transparency, low costs, and flexibility, ETFs have become an increasingly popular investment choice for those looking to navigate market volatility.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The fixed income ETF segment is estimated to witness significant growth during the forecast period. The fixed income Exchange-Traded Fund (ETF) sector holds a significant position in the investment market. Fixed income ETFs function as bond funds, investing in various types of fixed-income securities, including corporate, municipal, and treasury bonds. Unlike traditional corporate bonds, which are typically sold through bond brokers, fixed income ETFs trade on a centralized stock exchange. This setup offers bond buyers increased exposure to the stock market, as they can easily buy and sell their holdings throughout the trading day. Major market participants, such as BlackRock, Inc. And The Vanguard Group, Inc., provide a range of fixed income ETFs, including treasury bond ETFs, corporate bond ETFs, and aggregate bond ETFs. The government's support for financial market stability and the growing popularity of alternative trading funds, like ETFs, contribute to the continued growth of the market. Investors can access various asset classes, including bonds, equity, commodities, currencies, and specialty sectors, through these computer-built investment vehicles.
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The fixed income ETF segment accounted for USD 2.19 billion in 2018 and showed a gradual increase during the forecast period.
Europe is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market in North America experienced significant expansion by 2023, holding a substantial market share with approximately USD 8.4 trillion in assets. This growth can be attributed to the increasing popularity of ETFs, particularly in the areas of bonds, equity, commodity, currency, and specialty sectors. One notable trend driving this growth is the adoption of active ETF strategies, which now manage USD 630 billion in assets within the region. North America has been more receptive to active ETFs compared to other global markets, with these strategies accounting for a quarter of the region's total inflows in 2023. The government's continued support for financial market stability and the convenience of physically-backed ETFs have further fueled their widespread use as an alternative to traditional trading funds.
Computer-built ETFs have also gained traction, offering investors precise exposure to various market segments.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Market liquidity is the key driver of the market. Exchange-traded funds (ETFs) are investment vehicles that offer investors the affordability and transactional efficiency of buying and selling stocks while providing the diversification benefits of traditional investment funds. ETFs function as exchange-traded products, meaning they are bought and sold on a stock exchange throughout the trading day, unlike index funds which can only be bought or sold at the end of the trading day based on their net asset value. ETFs offer investors access to various asset classes with high liquidity, including equities and fixed income. The liquidity of an ETF is influenced by its composition and trading volume.
ETFs are commonly invested in large-cap markets due to their high liquidity. Moreover, the trading volume of an ETF significantly impacts its liquidity. As a result, ETFs provide investors with an attractive option for implementing passive investment strategies in a cost-effective manner, even during market volatility.
Growth of bond ETFs is the upcoming trend in the market. Exchange-traded funds (ETFs), specifically bond ETFs, have gained significant traction among investors due to their affordability and efficiency in large transactions. Institutions increasingly find it challenging to access individual bonds, leading them to opt for bond ETFs instead. These funds enable investors to trade securities that would otherwise be difficult and costly to access individually. According to industry reports, the expense of trading individual bonds from over 50 countries can be up to 65 times higher than bond ETFs. Consequently, the demand for bond ETFs is anticipated to rise, fueling the growth of the market during the forecast period.
Passive investment strategies, such as index funds, have also contributed to the popularity of ETFs due to their lower transaction costs compared to actively managed funds. Net Asset Value (NAV) of ETFs is calculated throughout the trading day, providing investors with real-time pricing information, making them an attractive option for those seeking transparency and flexibility in their investment portfolios.
Transaction risks is a key challenge affecting the market growth. Exchange-traded funds (ETFs) are investment vehicles that provide investors with an affordable way to access various asset classes and markets through a single security. As exchange-traded products, ETFs are bought and sold on stock exchanges, allowing for real-time pricing and flexibility. However, investing in ETFs, like any other investment, comes with certain risks. One such risk is market volatility, which can impact the Net Asset Value (NAV) of an ETF. Transaction costs are another risk factor to consider when investing in ETFs. These costs can include fees associated with buying and selling shares on the stock exchange, as well as the spread between the bid and ask price.
Given the real-time pricing of ETFs, these costs can add up over time. Investors may also face transaction risks when investing in ETFs that track international indexes or markets. For instance, if an investor buys a European ETF denominated in euros while the U.S. Dollar is weak against the euro, the investor may incur a loss before the transaction is even completed due to currency fluctuations. Despite these risks, ETFs offer several advantages over traditional investment funds, including lower transaction costs, transparency, and the ability to implement passive investment strategies such as indexing. By understanding the risks and benefits of ETFs, investors can make informed decisions and effectively manage their portfolios.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Betterment LLC - The company offers ETF services for bonds, stocks and cashes.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Exchange Traded Funds (ETFs) are investment funds that function as exchange-traded products. They allow investors to buy and sell shares just like stocks on a stock exchange. ETFs offer affordability and lower transaction costs compared to traditional investment funds. They track various indices, including equity, bonds, commodities, currencies, and specialty markets. During market volatility, ETFs provide financial market stability through passive investment strategies. Government support and the growing popularity of ETFs have led to an increase in the number of offerings, including physical ETFs and alternative trading funds. ETFs cater to both retail and institutional investors, providing access to various asset classes, such as equities, fixed income, real estate, commodities, and currencies.
With the advent of technology, ETFs are now integrated with fintech organizations, trade finance, and securities markets, utilizing advanced technologies like blockchain, artificial intelligence, big data, optical character recognition, and machine learning. ETFs have become an essential tool for small businesses, trade agreements, international trade, and foreign investments. Top players in the market include BlackRock, State Street, Invesco, and Vanguard Group. With scalability, security, and investment accounting solutions like Just Invest, FundGuard, and contingency NAV solutions, ETFs continue to evolve and adapt to the ever-changing financial landscape. ETFs come in various forms, including equity, fixed income, real estate, commodity, currency, and topix ETFs, with assets under management totaling billions.
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Market Scope |
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Report Coverage |
Details |
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Page number |
141 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 17.61% |
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Market Growth 2024-2028 |
USD 13.12 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
13.4 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 39% |
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Key countries |
US, China, France, UK, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Allianz SE, Amundi Austria GmbH, Betterment LLC, BlackRock Inc., Blackstone Inc, FMR LLC, Invesco Ltd., JPMorgan Chase and Co., Mirae Asset Securities Co. Ltd., Morgan Stanley, Morningstar Inc., State Street Corp., The Bank of New York Mellon Corp., The Charles Schwab Corp., The Goldman Sachs Group Inc., The Vanguard Group Inc., UBS Group AG, and Wealthfront Corp. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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