In addition to alternatives, asset manager DWS primarily wants to grow in the passive segment. „We were very successful last year,“ says Simon Klein, Global Head Xtrackers Sales at DWS, in an interview with Börsen-Zeitung. Net inflows in the passive segment totalled 21.2 billion euros in 2023. The firm had its best year ever for Ucits ETFs. It gained significant market share, and ranks second in the European ETF market in terms of net inflows. According to Morningstar Direct, the market share of Xtrackers, the ETF brand of DWS, totalled around 14% of inflows. „We are one of the fastest growing ETF providers in Europe,“ says Klein. „We also got off to a good start this year, and the positive trend has continued.“

In terms of assets under management, Xtrackers is in third place in the European ETF market, with around 170 billion euros and a market share of around 10.4% as at the end of 2023, according to Morningstar Direct. „Momentum is on our side,“ says Klein. „We have made a conscious decision in favour of organic growth, which is proving to be the right strategy. We are therefore well on track in the medium term to once again become the number two in Europe for ETFs in terms of assets under management.“

Overall, Xtrackers' growth strategy is clearly proving successful. „Innovation was in high demand last year,“ explains Klein. This applies to fixed-income products, but also to ETFs on the investment themes of artificial intelligence and big data, as well as on the S&P 500 Equal Weight. Last year, Xtrackers launched almost 50 new ETFs, more products than ever before. On the fixed income side, for example, ETFs with a fixed maturity were issued, and the maturity curve was completed. Xtrackers also launched many new products in the area of sustainable ETFs. There are also Factor ETFs , and innovation via ETFs that take biodiversity into account. Overall, the company is like a supermarket offering a wide range of ETFs, and has expanded this significantly in the past year.

In 2023, DWS also reduced the fees for almost 40 share classes, with assets under management of around 10 billion euros. „It has always been our declared aim to pass on economies of scale to investors,“ Klein explains. „And we are doing just that.“ Xtrackers has already reduced some fees this year too. One example of this is ETFs on Indian securities. „We try to act proactively when we see opportunities,“ he says.

The diversification and broadening of customer groups is a major issue. Digital channels such as neobrokers and online banks in particular are growing strongly. The number of savings plans is rising sharply. „We are benefiting from this in particular because we were the first provider to offer a free ETF savings plan back in 2010,“ explains Klein. „We now have 29 partnerships worldwide, 18 of which are in Germany, with neobrokers, online banks and digital providers of securities solutions.“ At the beginning of 2023, there were twelve partnerships in Germany. In Europe ex Germany, the number of partnerships has increased from four to seven since the beginning of 2023.

The ETF market is doubling every five years, and this trend is expected to continue. Inflows via digital channels will be a key driver. The ETF segment got off to an excellent start in the first three months of this year, and markets continue to rise. And the behaviour of retail investors has changed. So-called self-directed investors are investing in ETFs themselves via digital channels - whether as a savings plan or as a one-off investment, Klein explains. „We have partnerships with digital providers, and in many cases can also offer end investors investment opportunities with low or even no acquisition costs.“

The ratio of retail investors to institutional investors in the Ucits market is expcted to shift significantly, from the current 20:80 to around 40:60 in the medium term. In the USA, the ratio is probably already 50:50, where ETFs are even more important for retail investors. In this respect, it is still early days in Europe, where retail investors are becoming increasingly important for the ETF market.

Xtrackers also provides a lot of information on ETFs, investments and savings plans via its partners' websites. „Information and training are very important to us,“ says Klein. „The demand for our ETF newsletter is also very high.“

Together with its partner Galaxy, the company has just listed a Bitcoin ETC and an Ethereum ETC on the Deutsche Börse, replicating the performance of the two cryptocurrencies. „We are working with Galaxy here because this company has a great deal of expertise in the crypto market,“ explains Klein. „In this area in particular, it is important to work with an experienced partner and provide a robust product structure.“ Takeup of cryptocurrencies is still at a relatively early stage, but more and more institutional investors are now interested in crypto investments, after the SEC authorised Bitcoin ETFs in the USA.

Another innovation is the ETF on the MSCI World Index without a US equity component. With this product, customers can control the US portion of their investment themselves. There is also great interest in this product.

Active ETFs have already been launched in the USA. „We are also looking at various topics in Europe and want to become active in active ETFs here too,“ explains Klein.

Xtrackers is also seeing success on the US ETF market. A year ago it had three ETFs with more than one billion dollars, while now there are seven „billionaires“.“ Last year, seven ETFs were launched in the US, four of which were on the thematic side. One highlight was the US National Critical Technologies ETF, launched together with Solactive, which invests in sectors such as critical infrastructure. „We also had the largest ETF launch on the market in the US last year with around 2 billion dollars,“ says Klein. „That was an equity ETF on the MSCI USA Climate Action Equity ETF, in which a pension fund invested immediately.“ More will be done on the US market, and there are several products in the pipeline.

„Overall, we are very well positioned and back on track for growth,“ explains Klein. „We will continue to expand our product range with innovations, pass on economies of scale through fee reductions and, above all, expand our digital channels.“ And there is a new product logo, Xtrackers by DWS, making clear to investors that Xtrackers is part of DWS.