Changing the dynamic between public and private markets

ETFs public markets private markets VanEck Arian Neiron

21 May 2024
| By Laura Dew |
image
image
expand image

Innovations in the ETF space are changing the dynamic between public and private markets, according to VanEck. 

On the one hand, public markets provide investors with liquidity and transparency as well as immediate price adjustments but also expose investors to volatility. 

On the other hand, private markets can offer high returns due to less competition and the illiquidity premiums but need a long-term investment horizon and have limited liquidity. 

But Arian Neiron, chief executive and managing director of Asia-Pacific, believes the ETF space is changing this divide with innovative approaches to indexing. These allow investors to diversify into private markets via a single trade which provides the benefit of increased price discovery and liquidity.

The idea of having an allocation to private markets via a single manager in a listed investment trust or wholesale managed fund is a “dangerous” idea, he said.

“We think innovations in indexing and ETFs are changing this dynamic. Irrespective of which market you invest, diversification remains key. Diversification by names, sectors and managers. 

“Because of the disparity of returns among managers in private markets, we would argue manager diversification is more important in private markets. And that is where ETFs are helping investors to access those opportunities.”

VanEck offers both a listed private credit ETF and a listed private equity ETF. The former is a portfolio of the 25 largest companies involved in private credit, while the latter is a diversified portfolio of 50 listed companies that provide exposure to venture capital and buy-out opportunities. 

Both track indices calculated by research house LPX Group which allow investors to see the performance of a proxy global private credit or proxy global private equity exposure as well as provide an indication of the overall health of the markets. 

Read more about:

AUTHOR

Add new comment

The content of this field is kept private and will not be shown publicly.

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

JOHN GILLIES

tHOSE 989 WHO ARE CEASED WILL GO ON TO LIVE A LONG AND HEALTHY LIFE JG...

4 days 19 hours ago
Chris Cornish

What a sticth-up. Looks like Labor Senator Jess Walsh follows Stephen Jones who follows what the industry super funds ...

4 days 16 hours ago
Peter Swan

This report is a blatant display of far-left factional partisanship, treating superannuation funds as state property and...

4 days 17 hours ago

ASIC has cancelled the AFS licence of a Sydney wealth firm, the fifth Sydney firm to see a cancellation since the start of the year....

2 weeks 5 days ago

More than 20 winners from the funds management industry have been crowned at this year’s awards....

1 week 5 days ago

ASIC has obtained interim orders from the Federal Court to freeze the assets of a registered managed fund and prevent its former director from leaving Australia. ...

6 days 16 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND