The number of average trades in ETF’s increased by 95.2 per cent for the twelve months to November 2006, while the market capitalisation of ETF’s grew 38 per cent in the same period.
“This increase is a sign that investors have a growing understanding of the benefits of these products,” said State Street Global Advisors managing director Rob Goodlad.
ETFs are investments that contain a pool of securities representing a specific index such as the S&P/ASX 50 index, S&P/ASX 200 index or the S&P/ASX 200 listed property trust index. They are built like managed funds but trade like shares.
They are priced continually and can be bought and sold throughout the trading day via the ASX.
“ETFs provide a diversified investment for the fraction of the cost that investing in a broad range of assets would usually bring,” Goodlad said.
Increase demand for ETFs from financial planners has seen Aegis add the State Street Global Advisors (SSgA) streetTRACKS S&P/ASX200 index fund onto its Aegis model portfolio – the Aegis Australian Share IndexPlus Portfolio, according to Aegis group executive David Heather.
“Aegis designed this portfolio following increasing levels of interest from financial planners for portfolios that provide a combination of broad market exposure and the potential for additional outperformance through the skills of active managers,” Heather said.
“The inclusion of streetTRACKS is a low cost way to provide direct exposure to the S&P/ASX 200 index, which provides the core or beta component of this style of investment.”
