- Thursday, 29 January 2009 | Vishal Teckchandani
American investors pumped nearly $200 billion into ETFs in the first 11 months of 2008 and pulled $193 billion out of managed equity managed funds, according to the Investment Company Institute of Washington.
The ETF growth story is poised to continue and the sector's assets under management will soar to $1.5 trillion in 2009 from the present $1.06 trillion, according to Barclays Global Investors (BGI).
"ETFs are in demand for their liquidity and transparency, making them the preferred investment vehicle for managing risk," BGI iShares Australia co-head Adam Seccombe said.
"Demand here in Australia has risen noticeably in the past 12 months as familiarity has increased and we are confident ETF trading will continue to increase consistently with trends worldwide.
"We are seeing a growing segment of advisors and investors who have embraced the appeal of ETFs and are using them as building blocks in their clients' investment portfolios."
Average daily trading volume of ETFs soared 32.5 per cent to $120.6 billion a day in 2008, according to BGI's latest ETF Industry Preview.
BGI's iShares Australia unit has 16 ETFs which charge fees from as low as 0.09 per cent to a high of 0.74 per cent, according to the iShares website.
State Street Global Advisors offers three ETFs locally as well.
ETFs are index funds that trade like ordinary shares on a stock exchange.
Latest from InvestorWeekly
- Nikko AM restructures multi-asset teams
- First State Super adds MSCI platform
- Henderson launches fixed interest fund
- Asset managers facing operational pressures
- Perpetual expands trustee services in Singapore
- Christian super funds merge
- Funds management mergers tipped to continue
- AMG acquires River Road Asset Management
- Aus Unity fund acquires option for green office building
- NAB in talks with global custody providers
- Retirement income innovation must be inclusive
- Weighing up default fund insurance
- Don’t neglect developed markets
- Hunting for ‘preferred infrastructure’
- Westfield: a failure of engagement
- Can Europe avoid Japan’s fate?
- Cleaning up with clean technology
- Obsession with fees hurting retirees
- Do we need independent directors?
- Australian corporate debt: The phoenix rises
- NGS Super board appoints employer director
- AustralianSuper appoints deputy chair
- HUB24 appoints managing director
- Takeovers Panel appoints four new members
- Standard Life expands European business team
- IRESS confirms D'Aloisio as chairman
- Voya IM expands fixed income team
- Westpac Institutional Bank hires GM
- Skaffold hires wholesale markets head
- Roy Morgan appoints GM, financial services