iShares, the exchange-traded funds (ETF) platform of BlackRock, said it has seen an uptick in the amount of iShares assets held on wrap platforms, signaling that ETFs are gaining greater traction with financial advisers after the introduction of the Retail Distribution Review (RDR).
iShares recorded assets of £1.05bn held on nine wrap platforms - 7IM, Ascentric, AXA Wealth Elevate, Fidelity FundsNetwork, Novia, Nucleus, Raymond James, Standard Life and Transact - as of the end of the September 2013, a growth of 23% compared with the end of 2012.
A total of 27 platforms offer iShares' ETFs.
Corporate bond ETFs were the most popular type of ETF during the third quarter, attracting inflows of £56m.
Investment was focused on shorter duration funds such as the iShares £ Corporate Bond 1-5yr UCITS ETF, which provides exposure to sterling denominated corporate bonds that are between one and five years from maturity.
Developed market equities also continue to dominate the ETF space, according to iShares, with £47m flowing into this sector.
Mid and small cap equities proved particularly appealing and the iShares FTSE 250 UCITS ETF and iShares S&P SmallCap 600 UCITS ETF attracting inflows.
Demand for income-focused funds remained strong, with £14.7m flowing into dividend-focused ETFs such as the iShares EURO Dividend UCITS ETF.
The UK proved a popular investment this quarter with the iShares £ Corporate Bond UCITS ETF attracting inflows of around £15m and the iShares UK Gilts 0-5yr UCITS ETF seeing £16m of inflows, showing further appetite for UK bond exposures.
iShares head of intermediary sales UK Pollyanna Harper said: "Financial advisers are becoming much more comfortable with how ETFs work and how they can be used in client portfolios.
"This trend is partly due to the changes brought about by the Retail Distribution Review, but equally there is much more information available now to investors and advisers alike.
"As a natural consequence, we're seeing more advisers pick ETFs as a cost-efficient way of allocating to asset classes and wrap platforms are an ideal and highly effective way of accessing them."
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