JOHANNESBURG (miningweekly.com) – There is a lot of scope for growth in exchange-traded products (ETPs) and exchange-traded funds (ETFs), including gold and platinum ETFs, as investors seek to diversify away from only investing in equities, Deutsche Bank head of ETF Structuring Manooj Mistry said on Thursday.

He said that there has been strong inflows into single commodity-linked ETPs, also called exchange-traded commodities, like gold and platinum funds, in the past few years.

Mistry noted that while there has been a lot of growth in all forms of ETPs, globally, in the past two to three years, this only totalled less than 2% of global investments.

However, he expected the growth trend to continue, with the total global ETF market estimated to increase its assets under management (AuM) to between $1,2-trillion and $1,4-trillion this year.

The global ETF market had grown its AuM by 41,5% in 2009, with the combined US and European ETFs increasing their AuM beyond the one-trillion dollar mark.

The European ETF market had grown its AuM by 46% in 2009, with a further 27% growth in the AuM expected this year.

Mistry pointed out that while the majority of ETF flows up to December had been invested in equity and fixed-income products, other asset classes, such as commodities and hedge funds, were seeing a lot more interest.

A recent survey conducted by Deutsche Bank in Europe had revealed that more people were starting to recognise the importance of ETPs as a means of diversifying their investment portfolios, said Mistry.

Further, there had been a lot of interest from European investors in investing in ETFs through developing market and emerging market equities, as well as in commodities.

Mistry explained that these ETFs often gave investors access to markets, which were difficult to access through traditional means.

However, while ETFs were set to continue growing in popularity by both retail and institutional investors, Mistry did not expect this to replace actively managed funds. He noted that ETFs and actively managed funds would complement each other.