ETF diversification offer greater options
The diversification of funds available in the exchange traded fund (ETF) sector are now providing investors with significantly greater options across asset classes than three years ago.
This was one of the key findings to emerge from the Zenith Investment Partners Exchange Traded Funds Sector review.
Zenith senior investment analyst, Dugald Higgins said until recently, there was not enough diversification to seriously consider ETF portfolios with robust diversification. "We are now approaching the stage where this is possible for some portfolios," he said.
The report found that while Australian shares used to attract about 50 per cent of funds under management in ETFs, this figures has dropped to approximately 30 per cent as at June 30, 2015.
According to Higgins, the ETF sectors recording the most growth include fixed income and cash, international shares country funds, international shares global (unhedged) and Australian shares (alternative beta).
The Zenith report concludes that recent product development has resulted in the ETF sector evolving from one that merely offers low cost, market cap weighted strategies, to a sector that now offers a wider mix of strategies that embrace both factor and outcome orientated strategies, as well as active management.
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