DWS Sees Active Management Rebound Amid ETF Market Concentration

Sven Württemberger, CEO of DWS Switzerland, notes that European ETF inflows have surged by nearly 50 percent this year. Despite this dominance, institutional and semi-institutional clients are moving toward a more nuanced approach. The heavy weighting of a few technology giants within benchmark indexes has prompted concerns regarding over-exposure, leading investors to look for broader diversification and potential alpha through active, semi-active, and index-enhanced solutions.

This shift is already reshaping client mandates. Private banks and pension funds are increasingly inquiring about strategies that allow for targeted deviations from reference indexes to boost returns. Württemberger emphasizes that this does not signal the decline of passive products, but rather a more sophisticated, blended approach to asset allocation. DWS is actively responding to this demand, noting that its own active equity business recently recorded its strongest half-year performance in six years.

Simultaneously, the firm is doubling down on distribution innovation. The collaboration with Postfinance, which saw their joint ETF earn industry awards shortly after launch, highlights the potential for capturing retail interest. While current efforts focus on scaling assets to attract larger institutional players, DWS is also targeting neobrokers and digital platforms. By blurring the traditional lines between active and passive management, the firm aims to capture growth across both product segments as investors move away from viewing these strategies as mutually exclusive.