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Mark Gilbert

Can Fund Managers Escape a Fate Worse than Zero?

European fund managers are hoping complexity will save them from the squeeze on fees. They look doomed to fail.

Finding a way out of the maze.

Finding a way out of the maze.

Photographer: Fox Photos/Hulton Archive/Getty Images

Europe’s asset managers are trying to avoid the squeeze on fees that has befallen their U.S. peers selling exchange-traded funds. They are hoping to keep revenue streams as high as possible by stressing the attractiveness of more complicated products they can charge more for. It’s an effort that looks doomed to fail.

The size of the global market for ETFs has more than doubled in the past five years to $5 trillion as investors have snapped up the products. JPMorgan Asset Management is predicting a further explosion over the next decade or so.