ETF provider Global X is targeting $10 billion by the end of 2025 as it looks to the institutional space for uptake by super funds.
Speaking in Sydney, chief executive Evan Metcalf said the firm is looking to raise its assets under management in Australia from $6.2 billion currently to $10 billion by two years’ time.
This would be achieved by expanding the product range with differentiated offerings, expanding the sales team and reaching more investors.
Metcalf acknowledged Global X is “starting from behind” with a 4 per cent market share compared to other providers, but believes it can catch up. The overall Global X firm has US$46 billion, but this is far smaller than other major ETF providers, such as BlackRock, Vanguard and State Street.
However, Global X’s acquisition by South Korean firm Mirae Asset last June has provided it with greater resources and capacity by being part of a larger parent group. Mirae Asset has also made a $28 million investment in robo-adviser Stockspot.
Metcalf said: “For 2024, we want to build on our existing relationships and bring new products to the market where it is required based on client need for unique and interesting propositions.
“We are starting from behind in terms of resources, so we are looking to catch them up and compete with our peers on revenue, number of investors etc.
“We are not in the business of pursuing price wars, however, we are committed to competing aggressively on price where necessary. We will continue to focus on products that we know have upfront demand and are true to our investor-first philosophy.”
While the firm has the option of bringing funds from Global X’s range in the US to Australia, he said the firm is committed to developing ETFs suitable for the Australian market.
One area they are investigating is the $3.1 trillion superannuation industry and whether they are moving away from active funds in the face of fee pressure, the internalisation of investment teams away from third-party managers and meeting the Your Future, Your Super performance test.
Metcalf remarked: “Superannuation is where the wealth is and we are having interesting conversations on where ETFs can fit in there. They are questioning if there is still a place for active management.”
Manny Damianakis, head of sales at Global X, added: “Most ETF uptake has been direct via SMSFs and by financial advisers, but now we are looking at the insto space as they internalise their investment management.
“With super funds taking a more hands-on approach, there is a potential for them to look at ETFs and that is an area we are exploring.”
