BlackRock’s ASX-listed iShares S&P 500 ETF (IVV) has now surpassed $10 billion in assets under management (AUM).
According to BlackRock Australia’s director of wealth, James Waterworth, this reflects how local investors are increasingly turning to index funds to manage their core investments, streamlining their approach to portfolio construction.
“When IVV was locally listed in 2007, it became the first ETF to give Australian investors exposure to US equities,” Waterworth said.
“And since then, it has become a ‘gateway ETF’ for those seeking exposure to international markets. Typically, after purchasing IVV, we find that Australian advisers tend to buy a second or third ETF with an element of global exposure.”
Reflecting on what has been behind the AUM rise, he highlighted investor demand to be able to access the “household names” that make up US capital markets.
According to him, it is likely that many future innovations will stem from companies within the S&P 500 Index.
“Over the past two decades, sectors like technology, communications and consumer discretionary have fuelled the growth of US markets. And now, AI is propelling the markets forward, with Australians investing over $500 million in IVV in November alone – the fund’s best trading month on record.
“As one of the older ETFs listed in Australia, IVV has weathered extreme market events such as the global financial crisis and the COVID pandemic. Every $1 invested at inception is now worth more than $7. This 17-year track record gives investors the confidence that IVV is likely to continue to deliver over the long term.”
The asset manager has also enjoyed success with its fixed income range. In September, BlackRock revealed that iShares fixed income ETFs had reached US$1 trillion in assets globally – only a year after the global bond ETF industry surpassed US$2 trillion.
As such, the firm believes industry growth will continue to accelerate, with global bond ETF assets under management poised to reach US$6 trillion by 2030.
