Australian ETF market needs to innovate
The Australian Exchange Traded Funds (ETF) industry may have to capitalise on low cost investment options like MySuper if it wants to measure up to its global counterparts, an asset manager suggests.
Given the significant “room for growth” in the local ETF market, Ernst and Young Oceania Wealth and Asset Management leader Antoinette Elias said it would be interesting to see how ETFs innovate to achieve results.
“Growth will come from innovation, from more widespread users, and uses for, ETFs as they take market share from competitors,” she said.
However, the Asia-Pacific region is still forecast to outgrow Europe, with predicted growth rates across the region of between 20 and 30 per cent compared to Europe’s 15 per cent, according to Ernst and Young’s Global ETF survey.
“The European market is comparatively sophisticated, but geographically fragmented and carries a heavy regulatory burden,” Elias said.
“The rapid development of Asian ETF markets suggests that they could leapfrog ahead of Europe in the future.”
In addition to innovation, liquidity was seen as the key to growth, the survey showed, with a lack of liquidity the most commonly cited reason for fund failure.
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