Australian investors to be offered low-cost exposure to international indices through a single share.
The first tranche of international exchange traded funds (ETFs) are set to be launched in Australia by Barclays Global Investors (BGI) within the week.
The BGI iShares, which are awaiting admission by the ASX, are traded on the stock exchange in the same way as normal shares and will provide exposure to a range of global indices.
"Currently if an ordinary investor like you or I or an institution wants to investments overseas it has to be through managed funds or by the securities directly overseas," BGI chief executive Morry Waked said.
"What an iShare allows investors to do is get exposure to overseas markets through a single share," Waked said.
He gave the example of the American S&P 500 that gives investors exposure to 500 stocks through a single share.
BGI, which has 190 iShares listed globally, will initially offer eight ETFs and intends to offer at least 35 by end of next year.
"The listing of international iShares on the Australian Securities Exchange will offer Australian institutional, intermediary and individual investors a new, simple and cost-effective way to obtain immediate, diversified exposure to the world's investment markets," Waked said.
Waked said BGI will also look to further increase the offerings over time, including the possibility of international sector specific ETFs.
According to BGI, the ETF market is worth approximately $800 billion with BGI holding market share of around 50 per cent.
"Our experience overseas has seen iShares be extremely popular not only with retail investors but also institutions that use them as a hedging tool and who actively trade them," Waked said.
According to information provided by BGI, iShares are considerably cheaper to trade than the average managed fund.
Investors only pay nine basis points to invest in the S&P 500 fund versus an average of 178 basis points for a conventional US equity fund.
An iShares MSCI emerging markets share costs 75 basis points against an average of 186 across the 28 emerging markets funds offered in Australia.
Fund managers and annual performance reports brim with confidence, no matter how much money has been made or lost, but where does this leave the humble investor?... read more »
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