The ETF market has been growing rapidly in recent years and now accounts for over $3trn in assets globally. iShares is leading the charge, with three of its funds recently ranked as the industry’s top performers.

“Financial markets are becoming increasingly fast paced, and ETFs provide investors with exposure to markets on demand,” says iShares’ Fergus Slinger, co-head of EMEA sales at the firm. “They are a highly liquid and cost-effective way to get beta exposure to key markets for both strategic and tactical asset allocations.”

With more than $1trn in ETF assets, iShares is a dominant player in the passive industry. While scale provides itself provides numerous advantages, several other factors set iShares apart.

“In this day and age having a trusted brand in financial services is crucial, and iShares has a reputation among investors for providing first class service and a broad and deep product offering,” says Slinger.

Its client service, encompassing local and regional client teams, encompasses specialist sales teams that can offer individual market insights and best execution, according to Slinger. “Innovation is at the heart of our approach to product development. We have launched multiple first-to-market products, in many cases providing investors exposure to markets they previously would have found difficult to access.”

The iShares team has focussed on growing assets with retail investors since 2012. In the US retail market ETF uptake has been particularly strong, increasing retail advisory assets between 17% and 20% each year since 2010. “Over 80% of US advisers use ETFs in their portfolios, with nearly three-quarters of them expecting to increase their allocation to ETFs further,” according to Slinger.

Uptake in Europe has been less dramatic, with access being the primary hurdle. However allocations should increase as retail banks and other financial services providers have begun to establish ETF-based portfolios. iShares recent partnerships with Feri in Germany, InvestBanca in Italy and IG Group in the UK are prime examples of this trend.

The introduction of fractional share trading for private investors in the UK also alleviates a significant obstacle. More investors will be able to access the markets more effectively, and ultimately allow them to allocate their money more efficiently. It is a trend the firm has led in partnership with Winterflood.

As a subset of ETPs, smart beta is also gaining traction with investors bringing new inflows to the market. Contributing $29.6bn to global ETP flows in 2015, smart beta inflows accounted for $1 in every $12 invested in ETPs. iShares identifies the rise of smart beta and factor investing as a key driver of ETP growth in the next few years. As investors begin to focus on granularity – constructing portfolios based on factorbased exposures – demand for smart beta products will continue to increase, according the firm.

Slinger says iShares’ scale IS vital to providing both liquidity and access benefits to asset managers, as well as helping drive down costs. Smart beta products for instance, “tend to lie between active and passive and so does their cost, depending on the underlying investment universe,” according to Slinger. “We estimate 45% of the almost 800 smart beta ETPs globally to have total expense ratios below 50bps, however we could see more downward pressure on fees as this space grows.”

As for the future, iShares is confident that growth will continue unabated. “The investment case for ETFs is clear, and they will continue to grow exponentially for some time,” says Slinger. “We are predicting the global industry will grow to $6trn by 2019, with the European market exceeding $1trn, driven by use as portfolio management and financial instruments, as a fixed income tool, and for smart beta exposure.”

However, access to ETFs is the main challenge to their growth in certain markets, especially for retail investors. As such, “iShares is working closely with different parts of the supply chain in order to ensure that those who want to buy an ETF can do so.”