Paving the way for funds of ETFs

Regulation is laying the foundations for funds of ETFs and greater adoption of these products among IFAs, writes Matthew Craig.

Greater use of ETFs by fund of funds managers and those running multi-asset portfolios could well be the next stage in the ascent of ETFs. Regulatory changes have strengthened and will continue to bolster the case for ETFs within the fund-of-fund structure and multi-asset investing. The Ucits III rules increased the maximum a Ucits-approved fund could hold in another fund from 5% to 20%. Another important regulatory development on the horizon is the Retail Distribution Review (RDR) in the UK, which will encourage financial advisers to look at a wider range of products, including ETFs....