SSGA: Italian asset owners show growing interest for ETFs

Italian asset owners have shown strong interest in SPDR ETFs, as long term investors are looking at exchange traded funds for stable allocations, an executive with State Street Global Advisors (SSGA) told InvestmentEurope.

The turnover of SPDR ETFs on the Italian stock exchange registered an increase of approximately 90% in 2015,  from €718m in 2014 to €1.35bn in 2015, SSGA’s head of SPDR ETFs Italy Francesco Lomartire said, citing figures from Borsa Italiana.

Italy traditionally represents a fixed income market, Lomartire said, and investors have been relying on ETFs to expand the current asset allocation and to introduce fixed income exposures of higher returns to compensate the low income offered by the traditional asset class — mainly government bonds with negative yields and cash accounts.

“Since the beginning of the year, we have registered further appetite from Italian pension funds particularly on asset classes new to their traditional allocations such as emerging markets and high yield,” Lomartire said.

Following the listing of 15 SPDR ETFs on the Italian stock exchange in February, SSGA is continuing its plan to expand the coverage of different asset classes and make them available locally on the most important exchanges, Lomartire said.

“New client segments approaching ETFs and new advisory services promoted by intermediaries have contributed to increase the demand of such products in the Italian market, prompting the need to expand the pool of liquidity available to our investors,” he said.

Although it has been a turbulent start to the year for equity markets, SPDR ETFs have been able to rely on “its well diversified product range, offering many choices for investors in the search for yield, particularly in the fixed income space”, Lomartire said.

He said SPDR has seen inflows of $1.2bn to the end of April this year, capturing 7% of the European ETF flow and the third largest ETP issuers’ flow year to date.

“BCE’s plans to expand the quantitative easing and to include corporate bonds in the purchase program has offered a natural boost to the ETF industry, addressing investors needs to gain quick exposure to this asset class allowing them to benefit from the monetary policy expansion,” Lomartire said.

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