Exchange traded funds to hit local shores

Exchange-traded funds will soon hit the Australian market, following an agreement made yesterday between Australian Stock Exchange (ASX) and international invest-ment manager State Street Global Advisors (SSgA).

Exchange-traded funds will soon hit the Australian market, following an agreement made yesterday between Australian Stock Exchange (ASX) and international invest-ment manager State Street Global Advisors (SSgA).

Under the agreement, SSgA, the investment arm of State Street Corporation, and ASX will develop a range of exchange-traded funds (ETFs) for both institutional and indi-vidual investors in Australia.

The funds will be managed by State Street Global Advisors Australia (SSgA Austra-lia) and listed and traded on the ASX.

The first ETF is expected to be available next April. Although the first benchmark in-dex hasn’t been decided yet, the agreement allows for the exclusive development of ETFs over the S&P/ASX 20, the S&P/ASX 50, the S&P/ASX 100, the S&P/ASX 200, the S&P/ASX 300 and the All Ordinaries Index.

ASX managing director, Richard Humphry says the initial demand for the funds will be from institutional investors, with the product ideally suited to retail investors seek-ing a low cost way of gaining exposure to equities.

“Providing ETFs forms part of the ASX’s program to meet the growing demand of Australian investors by broadening the range of products and services we offer,” he says.

Humphry says the ASX’s decision to partner with SSgA is because of the global man-agers exchange-traded product experience.