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Use of ETFs on wrap platforms surges in 2011


 iShares, the Exchange Traded Funds (ETF) platform of BlackRock, Inc, has reported significant new flows into its funds through open architecture wrap platforms, indicating the increased use o

 iShares, the Exchange Traded Funds (ETF) platform of BlackRock, Inc, has reported significant new flows into its funds through open architecture wrap platforms, indicating the increased use of ETFs amongst advisers and discretionary fund managers and their selection of wrap providers to access them.
At the end of June 2011, iShares had a total of GBP723.5m in ETF assets held across seven wrap platforms: Ascentric, AXA-Elevate, Novia, Nucleus, Raymond James, Standard Life and Transact. This reflects a 30% increase in its assets held on platforms since the start of the year and a rise of 71% compared with twelve months ago.
The iShares Barclays Capital £ Index Linked Gilt and iShares Markit iBoxx £ Corporate Bond funds were the most popular iShares ETFs by assets this year, suggesting a preference for access to UK fixed income and to relatively low-risk bonds. Developed market property exposure remained popular, and exposure to broad-based equity markets was also much sought after. The iShares FTSE 100 was the largest iShares equity holding among platform users, with iShares MSCI Emerging Markets and iShares S&P 500 ETFs also appearing in the top ten iShares funds.
Since June 2010, iShares has seen the largest increase in its assets on Novia, with an increase of over 300%.
David Bower (pictured), Head of Marketing at iShares EMEA, says: “Our aim is to double the amount of UK retail assets we hold over the next four years. As part of this ambition, we are working hard to ensure that iShares funds can be accessed more easily through channels such as platforms. We are also focused on ensuring that UK advisers and investors have all the information they need on ETFs and how they can be put to work in strategic and tactical ways within a portfolio.
“The final details around how the RDR will be implemented remain under debate, but it has already acted as a catalyst for UK advisers to look at ETFs more closely. The flexibility and low total cost of ownership that ETFs offer are key attractions, and with iShares funds, advisers and their clients have the added comfort of seeing exactly what they are holding on a daily basis.”
Scott Beasley, Investment Analyst at Novia, says: “Demand for ETFs has been there since we launched the platform, and over the last year we have seen a huge growth in ETFs on the wrap platform, with iShares taking a very significant share of this business.  In recent months much of this can also be attributed to advisers’ increasing use of discretionary managers, many of which have sought to use passive management in the form of ETFs in their Novia model portfolios. We expect this trend to continue as the investment landscape continues to evolve rapidly in the coming years.”

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