UK-based asset manager AES International has announced that it has expanded the number of ETF’s and index linked funds from three to 12 but highlights that active funds will continue to play an important role.
The group’s new whitelist now includes six iShares ETFs and three Vanguard ETF’s. The former offering investors access to Asia, emerging market and corporate bonds, the Vanguard ETF’s include investment grade credit, Euro government Bonds and US government bonds.
Ashley Owen, head of investment strategies at AES International, said: “ETFs and index linked funds are hugely important products for clients to have in their investment toolkit as they provide low cost access to markets. They can be extremely efficient, particularly in rising markets when some active managers struggle to beat the index.
“We still recommend the use of active managers, however, as they are able to add real value in certain market cycles. It will be particularly interesting to see what happens in the next few years in the US and the UK as monetary policy tightens and market fundamentals return. I would not be surprised to see active management outperform passive over the next few years.”
As a group, AES International states that it rules out any which are synthetically backed as AES International believes this adds a largely unnecessary additional layer of risk to the fund.