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IG Group to launch ETF portfolios with Blackrock

IG Group to launch ETF portfolios with Blackrock

Online trading platform IG Group is to launch a range of exchange-traded fund-based investment portfolios though the group’s stockbroking platform for its clients.

Stockbroking clients will have the option to choose from a range of ETF-based investment portfolios using model portfolios from Blackrock.

The group said that this ETF investment solution will ensure that IG Group continues to deliver a quality product to their client base.

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IG Group is aiming for the portfolios to launch in 2016 and initially it will be made available to UK clients.

Last month Bill Vasilieff, Novia’s chief executive, called out other platforms that do not offer ETFs to investors and advisers, as the online wrap reported a 70 per cent jump in ETF business since last June.

Cofunds and Old Mutual do not currently offer ETFs, with Old Mutual stating that ETF demand is lower than for fund based solutions such as Spectrum, Cirilium, Generation and Wealthselect.

Ian Peacock, head of UK and Ireland at IG Group, said: “The launch of our stockbroking platform last year provided our clients with the latest in data, pricing and trading technology and the launch of these ETF portfolios is a natural progression in our commitment to provide our clients with an increasingly comprehensive offering.

Mr Peacock added that portfolios composed of passive instruments, such as ETFs, have the potential to disrupt the investment management industry, challenging the traditional high-fee approach to asset management.

“ETFs have become much more mainstream in the UK and Europe, and providing ETF-based portfolios will help to significantly broaden our reach as investor demand for these products continues to grow.

“As the clear market leader in the ETF market, Blackrock is a natural choice to provide expertise. This initiative will include marketing and educational efforts to raise awareness and understanding of ETFs, and we consider this to be a significant long-term opportunity.”

Michael Gruener, co-head of sales for iShares EMEA at Blackrock, said: “The global ETF market is currently growing at a rate of 20 per cent per annum and while this growth has traditionally been driven by the use of ETFs as individual building blocks, we are seeing a growing number of integrated ETF-based model portfolios that provide investors with a low cost, transparent, and flexible way to invest.

“While the availability of ETFs and ETF-based portfolios through platforms is still limited in the UK compared to many other European countries, solutions like the IG model portfolios are instrumental to raising awareness and understanding of ETFs within the market.”

ruth.gillbe@ft.com