Adviser demand key to future Avantis ETF launches
Avantis Investors has launched its first ETFs in the Australian market, backed by American Century Investments.
These dual-access active ETFs will cover global equities, global small-cap equities and emerging market equities, and seek to offer long-term capital appreciation.
Avantis is a $133 billion investment offering owned by global asset manager American Century Investments. Although it has been around for six years, this is the first time it has made its ETFs directly available in Australia.
Based in the US, the firm is growing its presence in Australia and currently has five staff in its Sydney office.
Working in partnership with responsible entity Equity Trustees, the ETFs are listed on Cboe Australia.
The three funds are:
- Avantis Small Cap Value Active ETF
- Avantis Global Equity Active ETF
- Avantis Emerging Markets Equity Active ETF
Speaking to Money Management, chief investment strategist Phil McInnis said: “We started with five ETFs in 2019 and now we have more than 30 US-domiciled ETFs. We certainly do expect to bring additional strategies across to the Australian market. Our approach tends to favour being client-driven. We like to talk to them about what they need and build that from there.
“These ETFs are a good starting point if people want to embrace our holistic philosophy, and these are good starting building blocks to do that.”
He added the firm is particularly active in the Australian advisory market as it has noticed advisers are increasingly using ETFs. Having launched its products in the US as both ETFs and mutual funds, McInnis said Avantis saw advisers “heavily favour” the ETF versions.
“We like supporting advisers. There’s a lot of value from receiving good financial advice, and we are trying to help those intermediaries serve their clients.
“Advice is very well developed in Australia and there are a lot of similarities between the two countries; do well for your clients, cost matters, diversification matters, tax efficiency matters, and we feel like we can check a lot of those boxes for advisers.”
Tom Clapham, head of APAC at American Century, said: “We are following a similar trajectory to the US in terms of flows into ETFs. These are accelerating towards ETFs over unlisted funds, so ETFs are definitely on the rise in terms of choice but also in terms of flows. In other jurisdictions, investors might only have the choice of an unlisted fund or an ETF but in Australia, the dual access structure means they have the choice of selecting what works for them and their circumstances and are paying the same fee for either version.”
AUTHOR
Laura Dew
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