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ETF trend speeds up the pace of consolidation in asset management

The acquisitions of Eaton Vance by Morgan Stanley and Legg Mason by Franklin Templeton illustrate how traditional active managers are being compelled to reconfigure their businesses in response to ferocious competition from ETF providers, the Financial Times writes.

Net flows into exchange traded funds have jumped 40 percent so far this year with the growing shift into low-cost index tracking vehicles forcing the pace of consolidation across the asset management industry to accelerate, reports the Financial Times.

Morgan Stanley agreed last week to stump up USD 7bn to acquire Eaton Vance while Franklin Templeton paid USD 6.5bn to buy Legg Mason earlier this year. The two deals illustrate how traditional active managers are being compelled to reconfigure their businesses in response to ferocious competition from ETF providers, the FT writes.

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