Never miss an update. Join our mailing list

iShares new ETFs IWLD and IHWL – Four ETFs in One

iShares have launched 2 new ETFs: iShares Core MSCI World All Cap ETF (IWLD) and iShares Core MSCI World All Cap (AUD Hedged) ETF (IHWL). The fund tracks the benchmark MSCI World Investable Markets Index which captures large, mid and small cap…

By ETF Watch - May 01, 2016

iShares have launched 2 new ETFs:

The second as the name suggests simply being an Australian Dollar hedged version of the first.

The fund tracks the benchmark MSCI World Investable Markets Index which captures large, mid and small cap stocks across 24 developed market countries (including Australia). The unique characteristic of this fund is that it is actually constructed with a blend of 4 different iShares ETFs, which are:

  • iShares Core MSCI EAFE ETF – tracks large, mid and small caps in Europe, Australia, Asia and the Far East (IVE)
  • iShares Core S&P 500 ETF – tracks the S&P 500 index in the US (IVV)
  • iShares Core S&P Small-Cap ETF – tracks the S&P Small Cap 600 in the US (IJR)
  • iShares Core S&P/TSX Capped Composite Index ETF – tracks large, mid and small caps in the Canadian share market (unavailable in Australia)

There’s surprisingly few ETFs on the ASX which focus on a global blend (with most focusing on a specific region), those available include include Vanguard MSCI index International Series (VGS) and SPDR S&P World Ex Australia Fund (WXOZ). The biggest difference between these funds and this new iShares offering is:

  • The new fund includes Australian Equities, the other funds do not.
  • The new fund includes small cap equities, the other funds do not.

As a result the new iShares Core MSCI World All Cap ETF has the highest true global allocation, however investors who are already heavily invested in Australia must realise this will slightly increase their local allocations.

What really interests us about this new ETF is its fund of fund model. As the ETF market in Australia matures and ETF providers begin to struggle to have a unique offering, we expect to see more of these fund of fund type models. Our post on the growth of Robo Advisers in Australia shows, there’s a market for diversified ETF portfolios and surely it won’t be long until the large ETF providers begin to offer blended options. This is only good news for investors who will be able to access these offerings at lower trade costs, so long as the premium in the management costs remains low.

Leave a Reply

avatar

Find a fund

Recent Posts

Are you ready for FIRE?
Aussie Firebug -October 12, 2019