Advisers showed appetite for corporate bonds in the fourth quarter, says iShares
Analysis of iShares exchange-traded funds on nine wrap platforms shows that corporate bonds were the most popular type of ETFs among financial advisers in Q4 2013.
iShares’ corporate bond ETFs recorded inflows of GBP59m on these platforms with the iShares GBP Corporate Bond 1-5yr UCITS ETF gathering GBP39m and the iShares GBP Corporate Bond UCITS ETF gathering GBP15m.
Developed equities ETFs were also popular and were the second largest group for inflows. Of the GBP49m inflows into the sector, the iShares EURO Total Market Value Large UCITS ETF received the most interest from advisers as a simple and efficient way to invest in shares of large European companies.
iShares’ assets held on these platforms has increased by 87 per cent in the last three years, from GBP557m in Q4 2010 to GBP1,045m in Q4 2013, showing considerable ETF appetite from financial advisers. iShares’ assets on these platforms increased by 23 per cent during 2013, with the largest increases recorded on Novia and Ascentric.
Mark Johnson, head of iShares sales in the UK, says: “We’re encouraged that more and more advisers are using ETFs to express their allocation views on bonds as well as equities. This traction is the result of advisers becoming more familiar with ETFs over the last few years. The Retail Distribution Review has certainly been a catalyst for growth, but there is also more research and information about ETFs available now. Growth can only continue as more platforms look to make ETFs available to their clients.”
Ian Taylor, chief executive officer at Transact, says: “ETFs are fast becoming one of the standard tools used by financial advisers in the UK. At Transact we seek to provide advisers with a comprehensive service that makes it easy for them to implement investment decisions and ETFs can fit squarely within this remit. Sterling bond funds are often popular on the platform but the uptick of interest in European equities suggests financial advisers may now be more optimistic in their outlook.”
iShares’ ETFs are available on 27 wrap platforms in total. The data reflects trends in the assets held on nine of the major platforms: 7IM, Ascentric, AXA Wealth Elevate, Fidelity FundsNetwork, Novia, Nucleus, Raymond James, Standard Life and Transact.
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