Invest
Is it time to put a food-style label on investment products?
Much like the food people eat, investors are being told they need to know what they are buying before purchasing exchange-traded products, as many are unaware of the ramifications if they don’t.
Is it time to put a food-style label on investment products?
Much like the food people eat, investors are being told they need to know what they are buying before purchasing exchange-traded products, as many are unaware of the ramifications if they don’t.
Blackrock Australia’s head of iShares ETF, Christian Obrist, explained that just like the food industry that was forced to put labels on products, ETP providers should be forced into stricter classifications.
“ETFs have typically been used as that catch-all. Thinking locally, you’ve seen a surge of money going into levered and inverse products,” Mr Obrist said.
“When you think of retail investors, which Australia has a high percentage of personal investors and for [Blackrock] it is important they know what they are buying.
“The danger is everything gets canvas as an ETF or an exchange-traded fund when in fact there are many different expressions,” he said.
The ETF provider explained that many of these products that are being listed as ETFs are not, instead performing different functions for sophisticated investors.
“In fact, a lot of products that have been listed on an exchange have been categorised as an ETF.”
“Whether that is an exchange-traded note, which is really a debt security issued by a corporate entity, or an exchange-traded commodity, could be physical, could be synthetic.
“Again, very different risk profile and also very different investment objective,” Mr Obrist told the media.
While highlighting that Blackrock is not against the use of other types of exchange-traded products, the ETF provider pointed out they need to be used correctly, otherwise investors could lose.
“The reality shows us these products typically work in a short-term manner if you execute, but if you hold longer, they decay in value, Mr Obrist concluded.
Did you enjoy this article? You may also be interested in:
- Investors seek ETFs during COVID-19 pandemic
- Avoiding another tech bubble through ETFs
- Why older Aussies should buy ETFs
RELATED ARTICLES
About the author
About the author
Mutual funds
Fund managers brace for regulatory challenges as outsourcing and innovation take centre stage
As regulatory complexities continue to mount, fund managers are increasingly turning to outsourcing and prioritising innovation to navigate the challenging landscape, according to a new study by Carne ...Read more
Mutual funds
New report highlights rising anti-money laundering risks and need for three lines of defence
A new report published by Ocorian and Newgate Compliance has warned that rising anti-money laundering (AML) risks are increasing the pressure for alternative fund managers to have three lines of ...Read more
Mutual funds
Centuria capitalises on non-core diversities with a new $50 million fund
The Centuria Capital Group, an established Australasian real estate fund manager, has successfully raised $50 million in equity from its network of Australian wholesale investors. Read more
Mutual funds
New study shows fund managers are eyeing overseas markets for capital growth
A recent study conducted by Carne Group, a prominent figure in the fund regulation and governance solutions sector for the asset management industry, has highlighted a significant shift in the ...Read more
Mutual funds
Equity Trustees reports robust performance with significant revenue and profit growth
Equity Trustees has witnessed a noteworthy advancement in its financial standing, marked by substantial increases in revenue and funds under management, administration, and supervision (FUMAS), ...Read more
Mutual funds
Micro-investing: Is it worth it?
Investing can be complex. It involves making financial decisions on how your money is going to be invested and managed over time, as well as figuring out the right strategy for each investment. There ...Read more
Mutual funds
RAIZ v Spaceship: Which is better value?
Raiz and Spaceship have become the two biggest apps in the micro-investing space, but which offers a better deal for Aussie investors looking for a hands-off savings strategy? Read more
Mutual funds
Sold your stocks during the dip last year? Here’s how much it might have cost you
If you cashed out during last year’s COVID-19 crash, here’s how much it might have cost you. Read more
Mutual funds
Fund managers brace for regulatory challenges as outsourcing and innovation take centre stage
As regulatory complexities continue to mount, fund managers are increasingly turning to outsourcing and prioritising innovation to navigate the challenging landscape, according to a new study by Carne ...Read more
Mutual funds
New report highlights rising anti-money laundering risks and need for three lines of defence
A new report published by Ocorian and Newgate Compliance has warned that rising anti-money laundering (AML) risks are increasing the pressure for alternative fund managers to have three lines of ...Read more
Mutual funds
Centuria capitalises on non-core diversities with a new $50 million fund
The Centuria Capital Group, an established Australasian real estate fund manager, has successfully raised $50 million in equity from its network of Australian wholesale investors. Read more
Mutual funds
New study shows fund managers are eyeing overseas markets for capital growth
A recent study conducted by Carne Group, a prominent figure in the fund regulation and governance solutions sector for the asset management industry, has highlighted a significant shift in the ...Read more
Mutual funds
Equity Trustees reports robust performance with significant revenue and profit growth
Equity Trustees has witnessed a noteworthy advancement in its financial standing, marked by substantial increases in revenue and funds under management, administration, and supervision (FUMAS), ...Read more
Mutual funds
Micro-investing: Is it worth it?
Investing can be complex. It involves making financial decisions on how your money is going to be invested and managed over time, as well as figuring out the right strategy for each investment. There ...Read more
Mutual funds
RAIZ v Spaceship: Which is better value?
Raiz and Spaceship have become the two biggest apps in the micro-investing space, but which offers a better deal for Aussie investors looking for a hands-off savings strategy? Read more
Mutual funds
Sold your stocks during the dip last year? Here’s how much it might have cost you
If you cashed out during last year’s COVID-19 crash, here’s how much it might have cost you. Read more
