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Williams de Broe predicts more use of ETFs to cut costs

Multi-manager boutique Williams de Broe is predicting an increase in funds of funds that invest in exchange-traded funds as pressure increases on multi-managers to rein in costs.

The company invests in ETFs within its Assetmaster fund of funds range because it says they allow real-time trading and have low total expense ratios relative to actively managed funds.

It says these factors are particularly useful when trading in and out of more exotic markets over the short term as part of a core and satellite investment approach.

Investment director and fund manager Laurence Boyle expects more funds of funds to hold between 20 and 30 per cent of their portfolios in ETFs to trade more efficiently, keep down costs and manage liquidity.

He says: “Many fund of fund managers buy and sell managers the way that stocks are bought and sold but some actively managed funds are glorified trackers. It is more expensive to own actively managed funds and you never know what the cost will be to get in and out of them.

“Why go for active management in sexy asset classes like Russia if you just want exposure to the most liquid market-cap stocks? Do you really want to invest in an illiquid active manager in those markets?

“With an ETF, we can have access to the market and can be traded out with no charges through our stockbroking arm. If we buy and sell a unit trust, by the time we have sold it we have just missed out on a 200-point rally.”


Fund manager leaving Templeton

Franklin Templeton growth fund manager Ken Cox is understood to be leaving the firm due to ill health. Cox has run the 144m fund since 2001 and returned 63 per cent in the three years to January 2005.

Neptune has four funds first in the sector in 2005

Neptune Investment Management finished 2005 with four funds ranked first in their sectors.Its European opportunities fund, US opportunities fund, global equity and managed funds all came first. The firm says its team-based approach fosters debate and a sharing of ideas, driving performance across its range. Neptune chief investment officer and managing director Robin Geffen says: […]

Consumers get help on contracting out

Aifa has launched a website to help consumers find advice on contracting out. The website lists by region IFA firms which are willing to discuss the pros and cons of contracting out and gives advice to consumers currently without an adviser.


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