Investor access to exchange-traded funds (ETFs) has improved following the inclusion of 50 products from iShares on the FundSettle fund processing platform. iShares is the investment manager BlackRock’s ETF business and FundSettle is part of international central securities depository (CSD) Euroclear Bank.
iShares products are the first ETFs on the platform, which hosts over 65,000 mutual funds, linking fund managers with third party distributors such as private banks and wealth managers. BlackRock and Euroclear said that they will initially make the service available in the Netherlands, but are exploring ways of offering ETFs in this way to other European markets.
ETFs typically trade like stocks on a stock market with intra-day pricing and offer investors broad exposure to financial markets, often holding securities included in popular indices such as the MSCI Europe and S&P 500. FundSettle will now enable end investors to buy and sell shares in ETFs like mutual funds, at the end-of-day ‘net asset value’ (NAV), thus offering an additional means of accessing the products.
BlackRock and Euroclear expect ETF use to grow in the Netherlands as financial advisors move to build portfolios that use ETFs and mutual funds together. In Europe, assets held in ETFs have grown over the past five years to US$373bn at the end of March 2013 compared with US$133bn at the end of 2007, according to BlackRock’s data.
“There is great interest in ETFs at the moment as the market moves towards a model without retrocessions and many investors want to be able to buy ETFs like mutual funds through their bank or wealth manager, “ said Leen Meijaard, head of iShares sales in Europe, the Middle East and Africa (EMEA). “Adding these iShares to FundSettle’s platform will help Dutch investors to build and manage a portfolio in a straightforward way.”
Jo Van De Velde, head of product management, Euroclear added: “By meeting clients’ demand to execute their ETF orders via FundSettle, we are effectively allowing investors to purchase ETFs in the same way as their mutual fund investments. “
The 50 iShares ETFs have been selected in response to Dutch client demand and offer access to stocks and bonds in both developed and emerging markets. Products include the iShares MSCI Europe ETF, the iShares S&P 500 ETF and the iShares MSCI World ETF.
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