The move to unbundle broadly diversified managed funds into sector funds has only just started, BT Financial Group chief executive Ian Martin says.
One of the trends of the past year has been for BT to unbundle some of its funds and launch specific trusts, such as the TIME technology fund and the Japan fund.
Martin says the trend to "slice and dice" funds is one which is likely to continue across the board.
"Sector funds are going to become more and more popular going forward," he says. "I envisage that you will see more and more fund managers offering a fuller range of sector funds."
Martin reckons that over time managers will offer a full range of sector funds and investors will hold an international equity fund as the core part of their offshore share exposure and gain additional exposure to sectors they like through specialist funds.
It used to make sense buying regions, he says, but now with globalisation buying sectors is a more preferred investment approach.
He says BT recognised this when it reorganised its international equity team along sectorial lines more than a year ago.
Despite industry themes being the in thing, there is still room for some funds based on regions.
Martin says BT has been very successful with its TIME fund attracting more than A$250 million since it was launched in Australia and New Zealand. While exact numbers on how much money New Zealanders have put into the fund are unknown, it has been receiving up to $500,000 a day at times.
Martin isn't revealing what plans BT has for more sector funds, except to say: "Watch this space."
He says the globalisation thing is also having spinoffs for BT and Principal.
BT has started, in the past couple of months, promoting some of Principal's credit funds to the institutional market in Australia and New Zealand and Principal is using BT's equity management skills in US funds.
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