The future of iShares
Monday 30 March 2009
We are keen believers in exchange traded funds. The world number 1 provider is iShares, owned by Barclays Bank. Recent news that iShares will be sold has caused a modicum of concern for investors.
Why are Barclays selling? What is the impact for investors already using exchange traded funds?
Barclays have passed the FSA stress test as reported in the FT on March 28 partly on the strength of the sale of iShares which would help bolster its capital ratios. Barclays confirmed that the test by the Financial Services Authority had shown it could cope with stressed credit market and economic conditions without raising more capital to shore up its balance sheet.
The sale appears to be forced on Barclays to realise capital but we will watch this space as events unfold. However, whoever is the eventual owner, it is in our opinion, particularly in the short term, it will be business as usual maintaining the status quo.
Other fund management groups at present are affected with personality issues when merging or being taken over...if the fund managers do not like the new regime they may leave. iShares however does not carry such fund manager risk.
iShares bring transparency to the investor which is the fundamental breeding ground for trust.
I await the news as it unfolds, but I have faith in the iShares operation and more importantly, exchange traded funds, irrespective of provider.
posted by Murray Round Wealth Management @ 15:07,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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