UK - Deborah Fuhr will now work independently, after the "disappointing" decision confirmed by Morgan Stanley last week to disband her renowned Exchange Traded Funds (ETFs) research, team in its drive to cut jobs.

Speaking today at a pre-summit briefing of an Asset Allocation conference in London, Fuhr said she left Morgan Stanley on Monday, and called the company's decision to cut her and her team "disappointing".

This is even though, according to Fuhr "ETFs continue to grow on every dimension, it is the only area where we even this year have seen consistently net inflows."

While she was described as working independently, Fuhr has also been approached by sovereign wealth funds (SWFs), who are the latest investor group now considering using ETFs as a tool - a move that heralds ETFs as entering an important phase in their development.

Speaking about the products' development, Fuhr warned investors currently considering the investment should make sure they understand what they want to invest in.

More specifically, it is important to understand where the ETF is domiciled and how it is benchmarked, since the way ETFs are constructed can be very different, she cautioned.

"Where the ETF is domiciled will determine what level of dividend you get inside the ETF," she said.

Concerns about liquidity should be address, since "the liquidity does really come from the underlying basket of shares".

Individuals in the market suggested last week Fuhr may set up a research house to cater to the growing broker demand for data. (See earlier IPE article: Morgan Stanley axes award-winning ETF team)

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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