The number of block trades in exchange-traded funds (ETF) has increased, partly because more institutional investors are using ETFs for tactical tilts, according to BetaShares.
Last week, a large institutional fund manager took at $15-million tilt in the BetaShares S&P/ASX 200 Resources Sector ETF (QRE) after the sector had fallen sharply.
"We saw a big institutional investor take a sector tilt in the domestic equities market through our QRE ETF; they went long for about $15 million in our QRE last week," BetaShares head of investment strategy and distribution Drew Corbett said.
"What they use it for is that manager obviously has existing portfolios of equity strategies, but they use the ETF to dynamically tilt the portfolio based on their analysis."
Parker Asset Management managing director Phillip Parker is also on the record for using currency ETFs to take temporary exposures.
Last year, Parker put as much as 10 per cent of the firm's portfolio in the BetaShares US Dollar ETF on the assumption the Australian dollar would fall back from its height of US$1.07.
Corbett said these transactions were part of a steady growth of block trades in the company's ETFs, although he was hesitant to attribute all of them to institutional managers.
"We do see larger-sized trades, but the interesting thing is whether they come from an insto, or from a model portfolio, because they look like block trades as well," he said.
"And we have had some model portfolios that have started to use our products as well."
