The launch of the iShares exchange traded funds series in the US earlier this year has become the market’s biggest ever mutual funds kick off, in terms of numbers of funds put into the market in a few months.
Altogether there were 39 of these new funds issued by Barclays Global Investors and$3.6bn (e5.9bn) raised in the period since May. BGI runs another 17 funds, the former the MSCI Webs, which were relaunched as iShares; these have assets of $2bn. The total size of the ETF market in the US is is put at $30bn.
In addition to the S&P 500, there are iShares issued on the S&P 400 and 600 indices, says BGI managing director John Demaine, who is responsible for bringing the iShare concept to Europe. “We also have them based on the Dow sectors as well as the Russell 1,000 and other indices.”
Demaine says it is wrong to regard them purely as investment funds, as they are designed to be investment tools able to meet a range of investor needs, particularly the more sophisticated. “There has been an explosion of interest in them by US investors and their advisers.”
Similarly in Canada the launch of the concept there resulted in a record inflow to the iUnit fund and with C$6bn in assets it is the largest equity fund.
Demaine, who was involved in the introduction of iShares to the UK market earlier this year (IPE April page 47), says the first fund tracking the FTSE100 index has over £100m invested in it. BGI says it it very pleased with this in such a short period, particularly as it knows it will take sometime for the concept to catch on in Europe. But other funds are planned for the UK and Europe, he says.