Industry Updates

DWS aims to overtake Amundi as Europe’s second largest ETP issuer by 2025

Amundi became Europe’s second largest issuer following its Lyxor acquisition in January

Theo Andrew

Stefan Hoops

DWS said it wants to leapfrog Amundi to regain its position as the second largest exchange-traded product (ETP) issuer by assets under management (AUM) by 2025.

Announcing its Strategic Ambition and Financial Targets 2025, the German asset manager said it expects the “ongoing strong growth of passive products” will help it regain its position behind Europe’s largest asset manager BlackRock.

DWS had €129.2bn AUM and a 10.1% market share at the end of Q3 2022, below Amundi’s €161.2bn AUM and 12.6% market share, according to Morningstar data.

The French asset manager stole second spot from DWS following its acquisition of Lyxor in January, with the latter hitting €100bn AUM a month before its takeover.

Both DWS and Amundi lag well behind BlackRock’s iShares business, which has a market share of 44.2% with an AUM of €564.2bn, as at the end of Q3.

“DWS aims to grow its Xtrackers and passive business globally as the company expects ongoing strong growth of passive products, which can be highly profitable given sufficient scale. In Europe, DWS wants to regain its number two position for ETPs,” the firm said.

Furthermore, DWS said it has an “ambitious growth” plan for the US passive market and is aiming to grow the AUM of its Xtrackers business by over 12% per year until the middle of the decade.

“In addition, to leverage the strength of its European ETF business, the company has decided to invest in an ambitious growth plan in the US,” it said.

“The focus will be on bespoke passive products and the goal is to grow passive assets under management at an annual compound growth rate of more than 12% per year until 2025.”

The ambitious plans come despite €3.8bn outflows in Q3 – despite net inflows into ESG ETFs – as the asset manager blamed weak investor appetite for ETFs.

Stefan Hoops, CEO of DWS, said: “We remain fully committed to ESG. It is a top priority for our clients and, as one of the largest asset managers in the world, we owe it to society to stick to our commitments.”

Against the backdrop of a challenging environment, DWS said it expected targeted and bespoke ETFs to outperform broad index replication, as well as a “renaissance of active management” to create alpha.

At a broad business level, the firm said it has targeted cost efficiencies of roughly €100m by 2025 through measures including divesting businesses, delayering the organisational structure, and reducing the footprint of the business.

Hoops added: “We are committed to self-funding our changes by reallocating financial resources freed up by divestments, delayering and cost initiatives. With our strategy, we want to deliver a better DWS with ambitious financial targets, enhanced transparency and an attractive dividend pay-out policy.”

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