European investors are spoilt for choice when targeting esoteric exposures through ETFs, however, Allianz Global Investors multi-asset fund manager Matt Toms believes many of these non-core building block ETFs are too small for fund selectors to access.
Reflecting on how his team implements using a mixture of ETFs and futures, Toms said there is a need to manage cash carefully and ETFs provide an efficient tool to do this.
“We would like to see more of these cash equivalent ETFs scale up,” he said. “One thing we are caught by is the fact we can only own 25% of an ETF, so if you have quite a big book of business, you need quite a big ETF.”
He added there is not a shortage of innovation or volume of ETFs but a “tremendous choice” available to investors.
“More often I find myself saying ‘that ETF is too small’ than I do saying ‘that ETF does not exist’, so that is more…
