ANZ, St George launch index funds
The funds management arms of ANZ and St George have both moved to establish in-dex funds in a drive to provide low cost managed funds to retail investors.
Both of the banks launch into the index market has almost doubled the number of players in the retail market which also includes both BBL, National Mutual and Vangard.
ANZ Funds Management has hired State Street global Advisers (SSgA), one of the 10 largest funds managers in the world, to manage its index funds, much like the group hired Fra
The funds management arms of ANZ and St George have both moved to establish in-dex funds in a drive to provide low cost managed funds to retail investors.
Both of the banks launch into the index market has almost doubled the number of players in the retail market which also includes both BBL, National Mutual and Vangard.
ANZ Funds Management has hired State Street global Advisers (SSgA), one of the 10 largest funds managers in the world, to manage its index funds, much like the group hired Frank Russell to manage its Gateway product.
ANZ Funds Management general manager for business development and marketing, Philip Myer, says ANZ is hoping to appeal to investors seeking low cost invest-ment funds.
"The ANZ Australian equities index is intended to provide investors with a low possible way of capturing returns from the Australian Share market," he said.
The two ANZ funds, ANZ Index Funds and Australian Share Index have minimum in-vestment of $100,000 and $5,000 respectively.
The Australian Share Index product is aimed at investors who are looking for an easy way to invest small amounts in the share market.
Neither of the funds require entry or exit fees and are available directly through ANZ and via the Internet.
The management expense ratios (MERs) of the ANZ Funds are at 1.8 per cent for Index funds and 1.25 per cent for the Australian Share Index.
"For the index funds, for professional investors which is 100,000 and over we're allowing free switching between investment options, because there are three in-vestment offers in one fund," Myer says.
Also jumping on the index bandwagon is Advance Fund Management (AFM), the funds management arm of St George Bank.
Head of marketing and product management for AFM, Eamonn Roles, says low cost was also behind the group's market debut.
"It basically is giving customers the opportunity to invest in a sweep of index funds covering all the major asset sectors," he said: "But the primary benefit is that it is low cost."
AFM's five funds cover international and Australian shares and fixed interest and Australian listed property trusts.
Roles said the MERs have been capped at 0.3 per cent a year, with the interna-tional and Australian fixed interest funds and Australian property securities at 0.2 per cent per year.
AFM's index funds are primarily only available through the Asgard master trust, on a wholesale basis. Barclay's Global Investors will manage the funds on behalf of Advance.
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