Sun, May 20, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

BlackRock expects more hedge funds to launch ETFs with exposure to underlying funds

Thursday, June 30, 2011
Opalesque Industry Update – BlackRock expects ETFs and ETPs to grow assets to over $2tln by 2012 and to continue to grow by 20%-30% a year for the next few years. After 18 years of existence in the US, the industry is experiencing a rapid cycle of growth as investors’ value liquid products post financial crisis. With the ETF industry holding over $1tln in assets, they continue to also gain popularity with hedge funds as both investments to include in larger strategy as well as hedge fund vehicles that solely invest through ETFs.

BlackRock’s ETF updates have anticipated continued growth of ETF usage in the hedge fund industry for some time, and the firm continues to have expectations that more managers will embrace these vehicles. In addition to the easy access of ETFs, hedge funds are noticing their appeal to investors, and their powerful distribution networks, the firm notes. Expectations are that in addition to using ETFs as investments more and more large hedge fund firms will look to establish their own ETFs with in-house funds as the underlying exposure, in an effort to broaden their reach to potential investors.

“This will on one hand, give more investors access to the asset class and the ability to do so in small sizes, with daily liquidity, but also make it challenging for them to understand what they are investing in compared to the historical daily transparency of the underlying portfolio in low-cost index based exposures which ETFs have become known for,” says the latest BlackRock ETF Report.

BlackRock’s expectations come on the heels of firm’s such as IndexIQ’s launch of hedge fund replication ETFs, which IndexIQ’s CEO Adam Patti told CNBC was a move “to democratize alternatives”, and make them available to a wider investment audience. The firm’s flagship ETF product has grown from $5m to $140m since its March 2009 launch. (Source)

Kirsten Bischoff

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. News Briefs - Warren Buffett: Target date funds aren't the way to go, Cambridge Analytica could be reborn under a different name[more]

    Warren Buffett: Target date funds aren't the way to go Planning for retirement can be complicated and stressful. This is why target date funds - funds that are managed based on when you expect to retire - are so attractive. Over time, the balance of stocks, bonds and cash evolve automati

  2. Investing - Hedge funds hike Smurfit Kappa positions amid takeover deal hopes, Hedge fund IBV Capital digs deep to unlock long-term value in a competitive market, Eisman of 'The Big Short' fame recommends shorting Deutsche Bank[more]

    Hedge funds hike Smurfit Kappa positions amid takeover deal hopes From Irishtimes.com: Two US hedge funds, Davidson Kempner and York Capital, have accumulated a combined 4.74 per cent interest in cardboard box maker Smurfit Kappa using financial derivatives. It comes as many investors cl

  3. Foundations of hedge fund managers gave big to controversial donor-advised funds[more]

    In the world of philanthropy and tax-deductible charitable giving, the explosion of donor-advised funds has touched off intense debate. Now, there is evidence that the DAF boom is being further fuelled by hedge fund foundation money. Four of the top five foundations that gave the most to large do

  4. Study: For hedge funds, smaller is better[more]

    From Institutionalinvestor.com: The smaller the hedge fund is, the better its performance is likely to be, according to a new study. The study - "Size, Age, and the Performance Life Cycle of Hedge Funds," released April 26 - sought to determine whether a hedge fund's size and age had any effect on i

  5. Hedge fund returns rose in April for first gain since January[more]

    From Bloomberg.com: Bloomberg Hedge Fund Database shows returns flat this year - Currency strategies had the biggest monthly gain at 13% Hedge fund returns increased 0.78 percent in April, reversing two consecutive monthly declines. The swing of 134 basis points was driven by gains in all seven