ETF research coverage expands


By Krystine Lumanta

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The latest eight exchange-traded funds (ETF) listed on the Australian Securities Exchange (ASX) will be given research coverage by specialist research house Alta Vista.

The firm said increased product competition meant dealer groups had to be highly aware of the implications of the new funds and also consider potentially adding to or changing their approved product lists.

In October, Market Vectors launched four sector-specific ETFs, State Street Global Advisors listed its three international funds earlier this month and Vanguard followed with an announcement for a new emerging market shares ETF by mid-November.

Financial advisers were now able to select from a growing number of peer ETFs, Alta Vista said.

“There are now three emerging market ETFs, three domestic property ETFs and four resources ETFs to select from,” the research house said.

“This adds to the pre-existing peer fund groupings of broad-based Australian equities, high-yield and United States equities, not to mention the fixed-interest funds.

“The new ETFs on offer are a welcome step forward and will begin to engender more confidence to invest in ETFs, given the wider and deeper universe of funds available.”

It said it observed issuers were not delivering simple “me too” products, which was a measure of issuers’ decisions on how to differentiate to provide real ETF investment choice.

Furthermore, continued product structuring innovation has eliminated the need for the US W8-BEN forms and delivered reduced fee structures.

“In our research view, ETFs are selections of securities that track a nominated index and accordingly quantitative research that is updated daily and forward looking is most relevant when assessing ETFs,” Alta Vista said.

“This approach helps to deliver better investment selection and investment outcomes in the client’s best interests.”

Alta Vista provides quantitative research on 51 equities-based and 10 fixed-interest-based ETFs on the ASX.

On a global basis, the business covers over 790 equities-based ETFs listed on the New York Stock Exchange.

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