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Follow the Money in 2019: Cerulli

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European ETFs and ESG vehicles will be two strong investments in 2019, according to Cerulli Associates’ The Cerulli Edge — European Monthly Product Trends Edition.

Despite market downturns, Cerulli stated, European ETFs met with slowdowns of inflows rather than outflows.

“We believe that European ETFs may be about to enter a new phase in their evolution demonstrating that they can be the vehicle of choice even when investors turn defensive,” said Cerulli’s André Schnurrenberger, managing director, Europe, in a statement.

Institutions that use ETFs as core holdings will continue to do so, he said, although some may move into active funds. He added that those investors will have to overcome any “skepticism” resulting from statistics showing actives have under performed their benchmarks.

Some niche ETF products may “fall by the wayside,” including Asia ex-Japan, Eastern Europe and even some smart beta funds, he said.

ETFs related to ESG will continue to grow, with institutions continuing their interest in this area. However, “ESG means different things to different investors and many are continuing to demand customized vehicles,” Schnurrenberger said.

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