Citywire - Passive pretenders: new boutiques edge into market

When REYL Singapore’s Daryl Liew wants an ETF he goes with established players, but he has started watching some young contenders moving into the space.

Selectors often prefer boutiques to big asset managers when it comes to actively-managed funds, especially where small-cap or EM strategies are concerned. But is this also the case in the passives market, which is dominated by giant providers?

Daryl Liew, head of portfolio management at Reyl Singapore, feels more comfortable going with the large, established players, and points to the blow-up of a VIX product run by Credit Suisse as an example of what can go wrong if you look elsewhere.

His go-to choices are usually such names as iShares, Vanguard or WisdomTree. However, he’s not ruling out looking at more niche players in the future. For example, Liew has been in touch with former iShares employees who set up their own firm over a year ago specialising in Chinese ETFs.

‘They have a different index criteria, looking less at traditional Chinese companies and more at new economy-type exposures. This could be interesting as they are moving exposure away from traditional Chinese SMEs towards more private sector consumption-oriented names,’ he says.

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