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Smartshares says low-cost offer makes sense for 'client first' advisers

More advisers are turning to Smartshares’ exchange-traded funds to create a low-cost core for their clients portfolios, its product manager says.

Friday, April 21st 2017, 6:00AM

by Susan Edmunds

Dean Anderson said Smartshares had experienced a 70% increase in on-market trading last year, and a 177% increase in direct investments.

The on-market trading reflected wholesale growth from a growing number of independent financial advisers and advice groups using ETFs in portfolios, he said.

Investment is up 300% so far this year compared to the same time last year.

Anderson said advisers considering their clients’ best interests were looking for products that would deliver over many decades.

“Particularly when there are low interest rates, minimising cost is a critical factor.

“ETFs have an important role minimising client costs and delivering a market return.”

He said more financial advisers were using ETFs as the core of a portfolio and then constructing active solutions around the margin to achieve some outperformance.

There have been claims that the next few years may be a good market for active managers as the interest rate environment changes and more international volatility rolls through.

Anderson said that was not a concern for passive managers because they were fixed on a longer time horizon.

“Who knows what the market is going to do? The key is the long-term. The typical adviser considers a 10- or 20-year period."

He said unless an active manager could promise to outperform over many decades,  it would not be a better solution for investors.

In Australia, investment in ETFs is set to exceed A$30 billion this year. More than 40% of Australian advisers place their clients in ETFs. 

The most popular Smartshares ETFs in NZ in 2016:

NZ Top 50

US 500

NZ Dividend

NZ Mid Cap

NZ Top 10

READ MORE: ETFs phone home: a stellar year for Smartshares

Tags: ETFs Smartshares

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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone ▼3.49 ▼3.49 ▼3.49 ▼3.49
BNZ - Classic - ▼2.55 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 13 July 2020 7:38am

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