ETFs tipped to help asset allocation

Smartshares’ three new exchange-traded funds are being described as a handy tool for advisers tackling asset allocation questions.

Monday, March 30th 2015, 6:00AM

by Susan Edmunds

The NZX business has announced the ETFs’ prospectus had been registered.

The new funds will take the total number of ETFs run by Smartshares to 10.

The new ETFs are the New Zealand Divided Fund, which invests in 25 of the highest dividend paying New Zealand listed companies, the Australian Resources Fund, which focuses on listed resources companies and the Australian Financials Fund, which invests in listed Australian financial sector companies.

The NZ Dividend Fund tracks the S&P/NZX 50 High Dividend Index, the Australian Financials Fund tracks the S&P/ASX 200 Financials Ex-A-REIT Index, and the Australian Resources Fund tracks the S&P/ASX 200 Resources Index.

Smartshares announced in December its intention to launch a broad range of domestic and international debt and equity ETFs, following the announcement it would acquire SuperLife. Together, SuperLife and Smartshares have more than $1.7 billion of funds under management.

Head of Smartshares Sam Stanley said the new ETFs would give advisers an easy sector allocation tool when they were considering clients’ asset allocation.

If they wanted exposure to the financial sector, resources, or another source of income in a portfolio, rather than trying to stock-pick, an ETF would give them diversified exposure in one hit, he said.

Stanley said they were also a cost-effective option, charging 54 basis points.

Two new ETFs were launched at the end of last year, investing in Australian property and Australian dividend stocks, and already have close to $100 million under management between them. They were seeded with $80 million.

Stanley said there had been a lot more interest in ETFs over the past 12 to 18 months. “People’s awareness of them as a product set is up but there is still some way to go.”

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