Financial Standard

A $34 billion public sector fund has appointed a new custodian, ending a 19 year-long relationship with J.P. Morgan. Funds SA has selected Northern Trust as its custodian, after a long tender process. In September last year, Funds SA said it had invited seven custodians to submit proposals: the incumbent J.P. Morgan, NAB, Northern Trust, RBC, State Street, BNP Paribas and Citi. It appointed Mercer Sentinel to advise on the tender process.

Funds SA chief executive officer Jo Townsend said: “We were very pleased with the level of interest and quality of submissions from the tender respondents. We look forward to partnering with Northern Trust during the next phase of Funds SA’s evolution.” “We would also like to acknowledge J.P. Morgan, whom we have had a very strong and productive relationship over many years during which Funds SA has changed and grown significantly.” Northern Trust will commence as the custodian in early 2020, following the transition.

The rest of this article can be found at financialstandard.com.au.

InvestorDaily

ETF assets in Australia have been forecast to reach $100 billion by 2022 in a new Stockspot report, which would double the sector’s size during the next three years. The fifth annual Australian ETF Research findings showed that ETFs increased by 26 per cent over the past year to $45.8 billion in funds under management (FUM). The online investment adviser expects Australian ETF FUM to reach $17 trillion in 2023, making up 0.6 per cent of the global market.

Index ETFs tracking Australian shares were observed to have one year returns of 13.1 per cent, contrasting against the average active exchange-traded managed fund (ETMF) tracking the local share market, which the report stated would give returns of 5.9 per cent. SPIVA research, Stockspot added, has similarly shown that 80 per cent of Australian fund managers have failed to match the index return over 15 years. ETFs saved investors a collective $300 million in 2018-19 according to Stockspot, compared to being charged a fee of 1 per cent per annum or greater with traditional active fund managers.

The rest of this article can be found at investordaily.com.au.

InvestorDaily

The first quarter saw global ETF investors rush into fixed income at the expense of equities, according to a BetaShares report. The ‘Quarterly Global ETF Review Q1 2019’ reported that the worldwide ETF industry ended the March quarter at a high of $7.7 trillion in assets under management, posting a quarterly growth rate of 12 per cent. BetaShares expects the industry to continue on a fast growth trajectory for the rest of the year, in line with the average growth rate of 20 per cent per annum in the last decade.

Australian, US and European investors bought more into fixed income over equities during the period. In Australia, bond products were the category observed to have the highest flows in the ETF sector, receiving more than $500 million of net inflows during the period. In the US, fixed income products had 68.2 per cent of flows in the quarter, while equities had 30.3 per cent.

The rest of this article can be found at investordaily.com.au.

InvestorDaily

Australia’s ETF sector ended May at a high of $48.7 billion in funds under management, with all of its monthly growth coming from net inflows, according to a new report. The BetaShares Australian ETF Review – May 2019 showed that the industry received around $1 billion in net new money during the month, with its monthly total market cap increasing by 1.4 per cent. ETFs were also reported to reach a record in terms of trading value, with more than $4 billion of value traded over the month for the first time.

Australian shares and bonds received the highest amount of flows, with both categories receiving around $250 million in net flows. “Fixed income ETFs have received significantly more attention this year than ever before as investors continue to exhibit caution on the equities market,” Alex Vynokur, chief executive of BetaShares, said. “Year to date, fixed income is the number one category for flows in the industry, marginally beating out the ever-popular international equities category.

The rest of this article can be found at investordaily.com.au.

InvestorDaily

InvestorDaily