Professional Planner|Zenith Fund Awards 2015 – exchange-traded funds (ETFs)
Winner: State Street Global Advisors
Zenith says: State Street Global Advisors (SSGA) continues its role as an ETF pioneer and is favoured by Zenith for its ability to generate simple yet robust strategies paired with the momentum and scale of a global player. SSGA has continued to build on its strong position, releasing several new products over the past 12 months, which have filled key slots for constructors of global portfolios. SSGA was first to market with global (hedged), emerging market, global REIT and global equity income strategies for ETF users. In 2015, SSGA added another core building block the launch of a series of funds based on the S&P 500 Index, in addition to releasing Australia’s first multi-factor ETF.
– Dugald Higgins,senior investment analyst
Zenith sector review: The increasing popularity and evolution of ETFs have seen the market grow very strongly over the past five years. The sector continues to flourish, with 127 products currently available and many more in the immediate pipeline. The sector reached a market capitalisation of $19.2 billion in August 2015, up 51 per cent on the previous year. The range of available strategies continues to grow, making effective portfolio construction easier as greater flexibility is introduced. The growth of “alternative beta” products also continues to offer greater flexibility to those seeking to complement pure market beta strategies.
Shaun Parkin, vice president ETF sales, State Street Global Advisors (pictured): The good thing about ETFs is that ultimately, they are not that complex. You see the underlying [securities] and the benchmark; they are relatively self-explanatory. For an adviser who may have used direct stock in the past, or managed funds in the past, it’s not that different a conversation. It’s more now that there’s that broad availability of ETFs to cover all the asset classes, and even getting a bit more granular in some of the asset classes, it’s more a conversation around utilising them how they would normally utilise a managed fund or a direct stock. It’s just a different vehicle. ETFs are not a panacea for everything but they are a way for planners that might be comfortable using direct to have a more broad diversification with one investment; or for those financial planners who might have only used managed funds or unlisted in the past we are starting to see those sorts of advisers starting to use them because they can see they are quite easy to use.