IG Group announced today it is set to offer a range of exchange-traded fund-based investment portfolios through its stockbroking platform, in addition to its offering of FX, contracts for difference (CFDs) and spread-betting. The firm’s global aim is to launch the new offering in 2016, but initially to make it only available to UK clients.
The British broker explains that the ETF-based investment portfolios will be constructed by IG Group using Model Portfolios from BlackRock, the largest provider of ETFs globally with its iShares ETFs. This move will broaden IG Group’s appeal for clients looking for long-term investments and not just short- term traders. For the industry, it shows that FX brokers can add more instruments and it might encourage IG’s competitors to offer ETFs of their own.
Ian Peacock, Head of UK and Ireland at IG Group, comments: “Portfolios composed of passive instruments, such as ETFs, have the potential to disrupt the investment management industry, challenging the traditional highfee 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.
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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, added: “The global ETF market is currently growing at a rate of 20% 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.”
Earlier today IG Group released its preliminary results for the fiscal year ending on the 31st of May. The firm reported a growth rate in underlying revenues of 8% to £400 million ($622 million). In a separate announcement, it was revealed that IG Chief Executive Officer (CEO) Tim Howkins will be retiring in October.