M&A Boom
For active managers seeking a piece of the passive pie, an M&A wave has also left few targets on the ground.
With over $500 billion in assets and 700 products between them, Europe’s top three issuers -- BlackRock’s iShares, Xtrackers and Lyxor -- have the breadth and pricing power to fend off most competitors.
Many of the old-guard asset managers have deep distribution networks for their mutual-fund businesses, which they could tap instead of relying on firms like McNeil’s. And unlike the U.S., Europe’s market is dominated by institutional investors that may be less inclined than their retail brethren in America to invest in one-off funds.
McNeil remains undeterred.
“The ecosystem that has developed in the U.S. is still taking time here. But it’s getting stronger.”
‘Derivatives Light’
One of the pioneers of ETF investing, he joined ETF Securities, then an independent provider, in 2005, a couple of years after it launched the world’s first gold fund in Australia. McNeil then struck out on his own with Boost ETPs in 2012 which specializes in leveraged and inverse products.
Despite the contentious nature of these speculative securities for Mom and Pop investors, McNeil says they compare favorably to other offerings, such as contracts-for-difference and spread bets.
“I call them ‘derivatives light,” he said. “Also, I think there are limited opportunities for people to hedge their portfolios -- with these, you can do that.”
If Mom and Pop can get comfortable with the triple-geared products he pioneered at Boost, then warming to the quirky funds now spreading across America may not be too far off.
“Often what happens in the U.S. comes here in three to five years,” he said.