Best of the Best 2023: Best ETF Manager
Low cost, diversification and convenience are attracting a new generation of investors to an ever-growing universe of ETFs, and BlackRock has been named Money's Best ETF Manager for 2023.
BlackRock's ETFs have attracted a staggering 120 million investors worldwide. The most popular ETFs with investors in 2022 have been cash and low-duration fixed-income products, says Jason Collins, head of iShares and index investment at BlackRock Australasia.
"With inflation going up, the cash and cash-like ETFs have been providing a return in line with rising cash rates," explains Collins. "US Treasury ETFs have attracted really strong flows this year, for example."
BlackRock, a pioneer ETF provider with its iShares range, wins this year's best ETF manager award. It offers investors a full smorgasbord of investments with 40 ETFs covering such areas as global equity, global fixed income, factors, ESG, thematics and complete multi-asset portfolios.
Since BlackRock launched its first iShares ETF in Australia in 2007, it has grown to manage $24 billion of investors' money.
Collins says the Australian ETF market hasn't grown as strongly as it has in some other parts of the world, but the total invested in ETFs on the ASX has increased by around 30%-40% a year over the past six years from $25 billion to $125 billion.
BlackRock's research shows that during the Covid period in 2020, ETFs really took off, with 40 million new self-directed ETF accounts opened. Of those, there has been a surge of interest by millennials or people in their early to mid-30s.
"The main reason for that is diversification, the low cost and the ease of actually buying an ETF versus other structures," says Collins.
The diversity of ETFs listed on the ASX continues to expand, with many types of specialist funds. For example, in 2022 BlackRock launched the iShares Future Tech Innovators ETF (ASX: ITEK), a future technology fund that holds robotics, clean energy and electric vehicle companies. It also launched a global bond ETF, iShares Global Aggregate Bond ESG (AESG).
The three other iShares ETFs launched in 2022 included two multi-sector ETFs: iShares Balanced ESG (IBAL) and iShares High Growth ESG (IGRO).
Collins says BlackRock has an education focus.
"iShares are all about democratisation of investing and the Balanced ESG fund is focused on the next generation of investor as opposed to the next generation of trader. "It is pretty much proven now that asset allocation is the largest contributor to returns that an investor has."
Andrew Landman, BlackRock's managing director of Australasia, says the convenience of ETFs is enabling a new generation to invest.
"ETFs have helped more Australian investors access diversified exposures and portfolio outcomes, and ultimately pursue their long-term wealth-creation and investment goals."
Get stories like this in our newsletters.