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Understanding the index investing habits of UK wealth managers

Index investing habits of UK wealth managers

Why, how and when wealth managers use exchange traded funds (ETFs) and index mutual funds as well as how they are reacting to changes in regulation and digital disruption.

Tim West

Partner, Head of Asset Management Consulting

KPMG in the UK


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The market for index products has exploded in recent years, but there is little information on how the UK wealth management market uses index products and why.

This report aims to shed light on the index investing behaviours and views of the UK wealth management industry. Our research consisted of both quantitative and qualitative interview programmes, speaking to organisations who together advise or manage over £4.5 trillion on behalf of retail clients.

The findings from the report address eight key areas about the use of index investments by UK wealth managers:

  • Not a case of either or, passive or active funds
  • How much will regulation drive usage of exchange traded funds (ETFs) and index products? 
  • Which is more widely used: ETFs or index mutual funds?
  • Is index investing an equities-only phenomenon?
  • Not all about total expense ratios (TER) 
  • Is smart beta considered a fad?
  • Will robo advice replace traditional portfolio construction? And
  • Will investors’ use of index products increase or decrease? 

To better understand the UK wealth management’s motives for index investing, read our: View on index investing from the UK wealth market report. 

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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