How ETFs could prove useful to insurers

As insurers look for new opportunities to boost the yield on their investment portfolios, exchange-traded funds could provide an efficient way to diversify and gain exposure to areas such as emerging markets and commodities. ETF providers are expanding their range of products, but insurers are cautious. Louie Woodall reports

Insurers need to venture further afield in the hunt for yield. With the developed world locked in a depressed interest rate environment, investment teams are increasingly turning to emerging markets to secure a decent income. These institutions are also looking to put their cash balances to work, even if these are only being held for a few months in between long-term fixed-income investments. When prospects for stable yield enhancement are few and far between, every little helps, and the