Barclays Global Investors is offering retail investors access to asset classes previously available only to institutional or high-net-worth clients with the launch of three exchange traded funds (ETFs).
ETFs are still a relatively new concept in the UK financial services industry. But they are gaining momentum as an investment option among IFAs as they trade in the same manner as stocks, when are in fact similar to index-tracking mutual funds but tend to trade at a much lower cost to mutual funds.
The Dublin-listed iShare tracker funds, which begin trading tomorrow, cover the private equity, UK equity, and global water markets.
The iShares FTSE EPRA/NAREIT UK Property fund will invest in UK Real estate investment trusts (Reits) or UK-listed property companies and sits alongside the firm’s existing Asia, US, Europe and Global property ETFs.
The launch is in response to the January introduction of UK Reit legislation and is the first ETF to invest in UK property.
Meanwhile, the iShares S&P-listed private equity vehicle tracks the recently-launched S&P-listed private equity index. This benchmark comprises 25 leading private equity companies listed on exchanges across North America, Europe, and the Asia-Pacific region.
Finally, iShares S&P Global Water will invest in water utilities, infrastructure providers, and water equipment companies across the world.
Colin Tipping, client director, financial institutions group at Barclays Global Investors (BGI), said the funds offer retail investors access to asset classes previously only available to wealthy clients.
“The launch is in response to investors seeking out alternative asset classes, which are traditionally difficult to gain access to,” he says.
“Certainly ETFs are being picked up by both retail investors and intermediaries and they are coming to us. The fact that intermediaries can get hold of these in a number of different ways, such as through a platform, is helping. We are really seeing them catch on to these ideas.
“They are clean investment vehicles, what you see is what you get. We’re trying to provide access to our products to as many parts of the investment universe as possible.”
Jennifer Grancio, head of distribution iShares Europe, adds: “There is strong growth in the European ETF market evidenced by assets growing by 50% in the past year.
“By launching these new products, BGI is developing the breadth of products investors expect from the leading ETF provider, the most recent three ETFs providing investors an easy way to invest in traditionally difficult to access asset classes.”
The launches bring the total number of ETFs offered by iShares and listed on the London Stock Exchange to 48.
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