Global equity returns shaping product development
The strong returns from global equities has boosted the number of products and investment strategies being brought to market according to research house Lonsec.
As part of its most recent annual Global Equities Sector Review Lonsec found that managers were developing and launching both actively managed and passive or index strategies with ‘smart beta' products in particular growing in prominence.
Lonsec, Senior Investment Analyst, Rui Fernandes said strong investment returns from global equities had attracted investors who were using them as the core of portfolios.
"As measured by MSCI AC World ex Australia Index, the global equities sector returned an impressive 23.63 per cent per annum for the three years to March 2015 and 13.89 per cent per annum for the five years," Fernandes said.
He also stated that investors had more direct access to global equities with the number of exchange traded funds, Listed Investment Companies and Managed Accounts driven by the rising demand for direct ownership by self-directed investors, particularly those investing via self-managed superannuation funds.
"Although the product structure in the global equities sector remains dominated by unlisted managed funds, SMSFs now have a number of choices to have access to global equities," Fernandes said.
"There has also been an increase in the use of feeder-fund product structures in the global equities sector in recent years. This is an easier and quicker route for manufacturers/distributors that have a limited footprint in the Australian market to offer ‘ready-made' strategies, an approach which will likely see continued growth."
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