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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…
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:
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:
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.
