Forex brokerage IG Group (LON:IGG) has partnered yet again with asset manager BlackRock to launch IG Smart Portfolios. The new product consists of a range of model investment portfolios constructed by the broker based on iShares exchange traded funds (ETFs) and use asset allocation insights from BlackRock.
“The launch of IG Smart Portfolios is an important step in the development of our investments offering. We see a huge opportunity in online investing, with strong demand from investors for online solutions and transparent fees,” Peter Hetherington, CEO of IG Group. “Through our partnership with BlackRock, and building on our long-standing online trading technology expertise, we believe we have created a best-in-class offering for investors who are seeking an engaging digital low cost solution to their wealth management,” he added.
With the new launch, IG Group aims to bring transparency to clients on the total cost of investing in its model portfolios, the broker noted.
“Many wealth management providers fall short when it comes to transparency on fees of direct-to-consumer offerings, leaving investors in the dark about the true cost of investing and the impact it will have on their returns,” IG Group said.
IG Smart Portfolios include five risk-rated portfolios based on asset allocation insights from BlackRock. The ETF-based portfolios are managed by IG Group specialists to respond to market conditions. They allow for access to fractional shares of ETFs. Investors pay no set-up, dealing, rebalancing or exit fees, while management fees are low (for details see the table below).
Following is a fee structure of IG Smart Portfolios:
|Total Value of IG Smart Portfolios||On the first £50,000||Between £50,000 – £250,000||Over £250,000|
|IG management fee (%)||0.65%||0.35%||0.10%|
|Average ETF costs* %||0.25%||0.25%||0.25%|
|Total Cost of Ownership (TCO)||0.90%||0.60%||0.35%|
“Our research shows that many investors are confident handling their own investment choices, but even so, a number are still being blindsided by fees. Hidden charges materially eat into investment returns and it is crucial that providers are transparent about all fees upfront, so that investors know the exact costs they will incur,” said Ian Peacock, head of UK and Ireland at IG Group.
BlackRock is a global asset management firm that services both retail and institutional clients. It has $5.1 trillion is assets under management (as at end-December 2016). The company’s portfolio includes investment management, risk management, enterprise investment, and advisory services, and a wide range of products, such as separate accounts, mutual funds, iShare (exchange-traded funds), and other. It is active in more than 30 countries and in the Americas, Europe, Asia, Australia and the Middle East and Africa.
IG Group operates worldwide with offices in 15 countries. It offers access to more than 10,000 markets, including forex, indices, shares, exchange-traded funds (ETFs), and binary options. In the UK it also offers spread betting.
The broker is based in the UK and regulated by the Financial Conduct Authority (FCA), but its subsidiaries are also regulated by the relevant authorities in the countries where they operate. It is a licensed bookmaker by the UK’s Gambling Commission and now a managed portfolio provider in the UK.