Australian ETPs up 39 per cent in 2017
Australia’s exchange traded product (ETP) industry grew by 39 per cent in 2017 to $35.4 billion, which represented five-fold growth compared to 2012, according to Morningstar.
The fastest growing areas were strategic beta and active products, which saw 21 ETP launches last year, Morningstar’s quarterly ETFInvestor found.
Additionally, according to investors, due to their increasing complexity ETPs were no longer viewed as simple low-cost vehicles and required a thorough research before investing.
However, incumbent passive ETFs continued to exert incredible gravity with Vanguard Australian Shares ETF VAS seeing a 43.5 per cent growth ($807.21 million), and was followed by iShares Core S&P/ASX 200 ETF IOZ taking $753.18 million (138 per cent growth) and SPDR S&P/ ASX 200 ETF STW attracting $497.3 million which represented a 16.1 per cent growth.
Also, Magellan’s launch of an innovative listed investment trust (LIT) product, Magellan Global MGG, threatened active ETPs and LICs, with MCG’s asset book of $1.66 billion.
Morningstar said in its newsletter: “If MGG were an ETP it would be Australia’s fourth largest. Magellan is a microcosm of the competition and innovation going on in fund market, having offered unlisted funds, a listed investment company (LIC), active ETPs, and now a listed investment trust.”
AUTHOR
Oksana Patron
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
