POWERED BY MOMENTUM MEDIA
ETFs not suited to institutional investors
|
Institutional investors have been warned against long-term investment in exchange traded funds (ETFs).
A new analysis issued by Watson Wyatt has claimed that while the development of the ETF sector has driven a great deal of product innovation, institutional investors should be considering ETFs in the same context as alternative investments.
It said this was because ETFs generally had higher fees than institutional index products, might have tax implications that required specialist advice and often contained counterparty risks for which investors might not be compensated.
Commenting on the research, Watson Wyatt senior investment consultant Chris Sutton said while ETFs were to be applauded for their substantial innovation and the way they had opened up a world of potentially interesting market exposures, the case for inclusion in institutional investment portfolios was not yet obvious.
He said the Watson Wyatt analysis suggested there were a good range of institutional passive products available in most markets that were cheaper than many ETFs.
AUTHOR
Mike Taylor
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
