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ETF issuers turn to M&A as asset creation hits record levels
The U.S. ETF landscape has expanded from 39 issuers in 2010 to about 350 today, with more than 500 unique ETF brands and fixed income and options ETFs drawing new dollars.
ETF issuer merger and acquisition activity is accelerating as the U.S. ETF market continues to grow, with asset creation breaking records and product proliferation rising, according to ETF Trends. The outlet cites the scale of competition as a key driver, noting that the number of ETF issuers has grown from 39 in 2010 to about 350 now. It also estimates that, counting issuers that support multiple brands, the market has more than 500 unique ETF brands. In this environment, ETF Trends points to a series of deals as asset managers pursue scale through acquisition rather than new product building, including T. Rowe Price’s planned purchase of F/m Investments, following Goldman Sachs’ move to buy NEOS Investments and Innovator ETFs. ETF Trends also links the M&A push to investor demand that has surged alongside current macro conditions. In a higher-for-longer rate environment, it says fixed income has gathered twice its asset footprint in new investor dollars this year, while options-based ETFs have been major asset gatherers for income and capital protection, reducing the time needed to add specialized capabilities like options income and defined outcome strategies.