Nine new funds for AES White List

AES International has quadrupled the number of ETFs and index linked funds on its White List of approved funds.

The number of ETFs and index linked funds AES International now recommends through its “White List” has jumped from three to 12. The nine funds are:

- iShares MSCI Emerging Markets – ETF;

- iShares MSCI Japan – ETF;

- iShares MSCI Pacific ex Japan – ETF;

- iShares Euro Corporate Bond – ETF;

- iShares Core £ Corporate Bond – ETF;

- iShares Index Linked – ETF;

- Vanguard US Investment Grade Credit Index – Index linked fund;

- Vanguard European Government Bond – Index linked fund;

- Vanguard US Government Bond – Index linked fund.

Ashley Owen, head of investment strategies at AES International, said: “We have extended the range of ETFs and index-linked funds we recommend to clients to ensure we continue to meet the needs of our most cost-conscious clients.

“We also want to ensure we have all major indices represented in our list of recommended funds.”

The criteria for selecting the funds rule out any which are synthetically backed as AES International believes this adds a largely unnecessary additional layer of risk to the fund (synthetically backed funds have no physical assets associated with them).

The funds chosen were also selected as they displayed the lowest tracking errors of comparable funds, ensuring clients are getting as close a match as possible to the chosen index.

Owen added: “ETFs and index linked funds are hugely important products for clients to have in their investment toolkit as they provide low cost access to markets. They can be extremely efficient, particularly in rising markets when some active managers struggle to beat the index.

“We still recommend the use of active managers, however, as they are able to add real value in certain market cycles.

"It will be particularly interesting to see what happens in the next few years in the US and the UK as monetary policy tightens and market fundamentals return. I would not be surprised to see active management outperform passive over the next few years.”