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ETF, LIC & LITs

Pass me the green

Pass me the green

Inside this edition we revisit the integration of Ethical, Social and Corporate Governance considerations through Exchange-Traded Funds (ETFs).

Given this is a popular and growing sub-segment of the funds management industry, we both look to the future and review past performance outcomes from the current listed product suite. Our findings suggest that clients have been inadvertently positioned into Information Technology and growth stocks as a result of product take-up. This can result in greater tracking error and detract from product/issuer core competency.

Bell Potter is of the view that a value or style neutral manager; and more importantly with an impact focus, can function as both a cornerstone or satellite piece in the current market of addressing ESG requirements.

Figure 1 – Equity ‘ESG’ ETF cumulative net money flow

Figure 2 – Top ETF flows for February 2023

Figure 3 – Top ETF flows for 12 months ending February 2023

Figure 4 – ETF market size as at February 2023

Figure 5 – Trailing average daily volume and value

Authored by Hayden Nicholson – Specialist Exchange Traded Funds & Listed Investment Companies at Bell Potter Securities, 24 March 2023
Important Disclaimer—This may affect your legal rights: Because this document has been prepared without consideration of any specific client’s financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. In the USA and the UK this research is only for institutional investors. It is not for release, publication or distribution in whole or in part to any persons in the two specified countries. This is general investment advice only and does not constitute advice to any person.
Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended.