iShares, the Exchange Traded Funds (ETF) platform of BlackRock, saw its assets held on wrap platforms increase by over a third in 2011 and by 175% on a cumulative basis since Q1 2010. This comes as financial advisers’ understanding of the benefits of implementing investment strategies via ETFs continues to grow.
iShares saw its assets held on six platforms reach GBP746 million at the end of 2011, an increase of 34% over the same period in 2010. Of the platforms – Ascentric, Novia, Nucleus, Raymond James, Standard Life and Transact – assets held on Ascentric and Novia increased most substantially, growing 88% and 96% respectively.
According to fund flows on the platforms, investors put money to work across a range of asset classes. The two most popular iShares ETFs on the platforms by net flows were fixed income products, with combined net flows of GBP78.4m, and six of the top ten were equity products. The top iShares funds by asset flows in 2011 were:
iShares Market iBoxx GBP Corporate Bond 1-5 ETF, a UK corporate bond fund that saw GBP42 million in net flows
iShares FTSE Gilts 0-5 ETF, a UK government bond fund that saw nearly GBP34 million in net flows
iShares FTSE EPRA / NAREIT Developed Markets Property Yield ETF, with net flows of GBP18 million
iShares FTSE UK Dividend Plus ETF, with net flows of GBP13 million
iShares FTSE 100 ETF, which also attracted GBP13 net million in flows on the wrap platforms
David Bower (pictured), Head of iShares UK, says: “The ETF industry is set to become a major beneficiary of the RDR, and this is already evident from the strong growth iShares saw on key wrap platforms in 2011. With the banning of commission to financial advisers as of 2013, ETFs will be on a level playing field with other investment products. This, combined with the fact that ETFs offer low cost and transparent access to a broad range of markets, means that ETF use amongst financial advisers and discretionary fund managers is likely to continue to rise.
“During 2012, iShares will introduce a number of new initiatives to spread awareness of ETFs further and to assist advisers in developing greater expertise around how to use them.”
Paul Boston, Sales and Marketing Director at Novia, says: “ETFs are playing an increasingly important role in both advisory and discretionary portfolios on the Novia platform. This is proving to be a well-trodden investment strategy that significantly reduces the overall cost of a clients’ portfolio. iShares is well known for its proven track record and maintaining the highest levels of transparency, and as a result iShares products have proven to be a very popular choice with our IFAs.”
