Still jobs to be had in troubled ETF sector
All is not entirely well in the supposedly buoyant world of exchange-traded funds (ETFs). The more exotic products, upon which a lot of the anticipated growth was predicated, have come up against some serious stumbling blocks. However, a relative shortage of expertise in this area, and a number of new players in the sector, means hiring is still fairly active.
A recent article on FT Alphaville points to the fact that UBS's decision to suspend purchases of its leveraged and inversed ETFs, and Morgan Stanley Smith Barney's possible move to do the same, could have big implications for an industry banking on ever-more exotic products for continued growth.
Similarly, ETFs related to commodity products are also experiencing problems due to fears of a clampdown by the CFTC.
However, data released by Lipper points to an industry still very much in expansion mode. Assets under management in Europe to 31 March 2009 grew by 12% year on year, to €123.6bn, and average monthly turnover increased by 34% to €29.8bn.
HSBC has also just entered the fray with the launch of a new fund tracking the FTSE 100, according to the FT, and has ambitions to become a major player in the ETF space. Source, a joint venture between Bank of America Merrill Lynch, Morgan Stanley and Goldman Sachs, is looking to gain a bigger slice of the ETF pie as well.
Chris Sevenoaks, a headhunter who specialises in the ETF market, says the proliferation of new players in this space has fuelled recruitment over the last six months.
"There's still a relative shortage of real experts in this field, meaning a lot of people are being swayed to move between companies," he says. "There's a big demand for product structurers, particularly on the fixed income side."
He adds that a number of people, disgruntled by the sale of Barclays' iShares business to BlackRock, are now more willing to jump ship to competitors.
But, with all these new players, Deborah Fuhr, global head of ETF research at BGI, told the FT she anticipated "a shake out and some consolidation" in the industry going forward.
