Fund managers take a bet each way with 'hybrid' listings

Fund managers are increasingly converting existing unit trusts into combined unit trust and exchange traded products to meet investors' demands for more ETP opportunities on markets.

According to Rainmaker analysis of ETPs at March 2022, approximately 15 per cent of the total ETP market's funds under management is now in these hybrid products.

"There are benefits and detriments to each legal structure," Rainmaker Information head of investment research, John Dyall said in Rainmaker's ETP Report for March.

The ETP structure may be used for large purchases or sales, where the brokerage rate is less significant, but if an investor wants to make regular transactions - such as via regular monthly super contributions or a regular monthly investment plan - the unit trust structure might be more appropriate.

The majority of fund conversions have happened in the international equity space - at $15 billion, with Australian equity products accounting for $1.4 billion and property accounting for $1.3 billion.