New Zealand institutional investors have been “thought leaders” in the take-up of exchange-traded funds (ETF), according to Jon Howie, head of iShares Australia.
Howie said historically New Zealand institutions have been “strong adopters” of iShares ETFs dating back to when the firm’s broad market-cap products first hit the market.
“But now we’re seeing lots of interest from New Zealand institutional investors in ‘smart beta’ ETFs that offer exposure to other risk premia – for example, low volatility,” he said. “New Zealand has been an early-adopter market.”
Bruce Edgar, New Zealand cricketing legend in the 1970s and ‘80s, represents iShares in New Zealand. Edgar has had a long career in the Australasian financial services industry including marketing roles for iShares ETF rival, State Street Global Advisors, BNZ Investment Management and Trustees Executors.
(According to his Linkedin profile, Edgar also scored the “most overlooked century of all time” during the infamous ‘underarm’ one-day cricket match between Australia and NZ in 1981.)
While it was easier to gauge the extent of the NZ institutional exposure to iShares, Howie said many retail investors here would also likely invest in its ASX-listed ETFs.
“We’ve got 19 US-domiciled funds listed on the ASX,” he said. “They bring the benefits of our US scale to Australian [and NZ] investors.”
Howie said the recent launch of a new range of products by the NZX was positive for the ETF market generally.
He said iShares would continue reviewing how to best serve the New Zealand market.
Owned by US mega-manager Blackrock, iShares is the world’s largest ETF provider, boasting over US$1 trillion in assets.
According to the latest Blackrock ‘ETP [exchange-traded product] Landscape’ publication, the global ETP market sits at just under US$3 trillion with over US$60 billion flowing into the products in the first two months of 2015.
Over 2014 the global ETP market saw inflows of almost US$330 billion, the ETP Landscape report says.
Vanguard, with more the US$475 billion under management, recently supplanted State Street (US$469 billion) as the second-largest ETP provider globally.