Around 400 visitors on site and online via live stream accepted Deutsche Börse's invitation and discussed, networked and exchanged ideas at Germany's largest industry event in Frankfurt - the Deutsche Börse ETF Forum. There was plenty of food for thought: six panel discussions, seven workshops and two keynote speeches by Google and the Deutsche Bundesbank.

To kick things off, leading Capital Markets representatives from the ETF industry gave an outlook on where the ETF market could be heading: Fragmentation of liquidity and less transparency distinguish ETF trading in Europe from the US. What do Gregoire Blanc from Amundi, Jamie Hartley from DWS Xtrackers, Sander van Nugteren from Blackrock and Paul Young from Vanguard AM expect and want for the European market? Greater transparency via a consolidated tape, more liquidity through new customer groups and a larger proportion of private investors via financial education. They expect a bundling of liquidity, increasing confidence of professionals in the market depth and hardly any effects of a PFOF ban.

“Germany is good at selling goods, not selling fun”

Three economists offered an economic view of Germany from the outside. Klaus Baader, Sociéte Générale, Paul Donavan, UBS Global Wealth Management and Stephen King, HSBC. Germany's economic development is atypical, based on structural problems, a botched energy policy, demographic developments and China's difficulties as an important trading partner. The three agree that Europe remains important for the global economy.                                                    

Lack of transparency increases costs, inhibits liquidity

The differences between on-screen and off-screen liquidity were discussed by buy-side representatives Eric Böss, Allianz Global Investors, and market maker Mark Pinckers from Flow Traders. ETFs can be more liquid than the markets they track, which is one of the instrument's great strengths. Cost is the most important factor. Both also emphasized the major differences to the US market: less transparent, more illiquid, also due to less use of algorithms in trading. And the “absence” of retail investments. Your outlook: No mega-innovations in sight, the market will simply continue to grow and trading by request for quote will increasingly be combined with trading on the platforms.

Bond ETFs with maturities as game changers

The range, assets under management and turnover of bond ETFs have grown significantly. Even if trading in individual bonds has also become much easier, ETFs have major advantages: more transparent, more robust prices, more liquid. The disadvantage of interest rate risks could be offset by the new maturity ETFs. These would be bought primarily by retail investors. This is the conclusion of the panel with Oleg Juretschko, Invesco, Konrad Kleinfeld, State Street Global Advisors and Angelina Kostyrina, DWS

Switch to active ETFs

Active ETFs, currently still a niche product, can provide an important building block for this. Their advantage over traditional products: Transparency and lower costs, agreed the three panelists, Jürgen Blumberg, Goldman Sachs, Barbara Claus, Scope and Ivan Durdevic, J.P. Morgan AM. The media increasingly reported that this would attract the attention of retail investors. Durdevic sees almost exclusively private individuals switching from traditional mutual funds to active ETFs, while Blumberg sees this happening among professional investors. Claus believes that the market will grow slowly and steadily unless there is a ban on commission.

Improved financial education and retirement savings accounts

Markus Jordan, Sven Schumann and Rudolf Siebel discussed how interest in long-term asset accumulation with ETFs can be further promoted. Improving financial education and the customer journey are important approaches here. However, it was agreed that a key lever would be tax incentives and substantial subsidies, such as those offered by the German government's planned retirement savings scheme.

The panel discussions were interspersed with a range of workshops offered by the sponsors. These topics were on offer:

• Interest rate turnaround, what now? Fixed income strategies for the next interest rate cycle from DWS Xtrackers
• “Thematic Investing” - future-oriented investments: How thematic investing opens up opportunities for returns from First Trust
• Emerging markets - opportunities amid diverging trends by Franklin Templeton
• Bitcoin Spot ETFs in the US: An accolade for Bitcoin, but long known in Europe, ETC Group
• Climb the mountain of European ETF data: Securing the best view, ETFbook
• Multi-Asset Workshop: Tactical positioning with ETF options, Eurex
• Sustainable investing: Keeping pace with trends and regulation, STOXX