Investors are more and more inclined to passive investing, which, for example, imitates the movement of stock indices. Its advantages include lower management fees and greater portfolio diversification with fewer transactions. This causes the growing popularity of ETFs that are used for this type of investment. Last year, the value of assets accumulated in this type of instruments exceeded USD 10 trillion. – according to the WSE after ETFGI. In Poland, this market is still small, but it is growing more and more dynamically. There are already 11 ETFs based on various underlying instruments listed on the Warsaw Stock Exchange.
ETF is an investment product that is a type of open-end investment fund in the largest markets. It is designed to reflect the movement of stock indices, commodity prices or other assets, such as bonds. This is also characteristic of passive investing – its goal is to achieve a rate of return closest to a given benchmark, which may be, for example, WIG20 or an index of Polish treasury bonds, regardless of whether they are increases or decreases. The opposite are actively managed funds, which are designed to provide a rate of return higher than the benchmark. Passive investing is recommended, among others novice investors.
“Investors’ interest in passive investing, including investing through ETFs, is growing rapidly. It is already at a decent level, although of course our appetites are greater. Due to the environment of still very low interest rates, the search for effective investing at the lowest possible transaction cost, in some markets, for example in Israel, ETFs constitute over 30% of the total. turnover” – says the agency Newseria Biznes Dr. Marek Dietl, President of the Management Board of the Warsaw Stock Exchange. – We still traditionally trade stocks or futures, these are the main products on our market, but there are more and more offers of semi-active, semi-passive management, i.e. creating ETF portfolios for the richest investors and changing their structure depending on the market situation.
There are 11 funds of this type listed on the WSE. The latest one debuted on January 17th. This is the first fund on the Warsaw Stock Exchange that replicates the bond market (Treasury BondSpot Poland index, TBSP). At the same time, it is the ninth fund introduced to the WSE by AgioFunds TFI in cooperation with Beta Securities Poland. The development of this market accelerated three years ago. So far, ETFs have relied on equity indices, mainly from the WIG family, as well as foreign indices S & P500, DAX and Nasdaq-100.