GQG considers active ETF launches

GQG is considering launching active exchange traded funds (ETFs) for its investors.

Many active fund managers now have an active ETF version of their managed funds, first pioneered in Australia by Magellan in 2020, including Fidelity, Franklin Templeton and Macquarie. 

For GQG, which offers three active funds in Australia, it is something the firm is looking into for its Australian investors. 

However, Laird Abernethy, managing director for Australia at GQG, questioned what this would mean for platforms if investors or advisers were able to buy them directly via the ASX and bypass a platform. Currently, one-third of the firm’s funds under management come from wholesale investors.

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Although the firm is headquartered in Florida, Abernethy said it has not explored offering active ETFs over there as the US has stricter disclosures with the Securities and Exchange Commission requiring US active ETFs to publish daily holdings. 

Abernethy also shared about the firm’s growth plans as it approaches US$100 billion ($151 billion) in funds under management. 

In July, it made a bid for rival fund manager Pacific Current Group (PAC) but this was eventually rejected by PAC’s largest shareholder. Although GQG said it still observes “strategic merit” in its proposal, PAC opted to cease the sale process. 

For Abernethy, he said the bid had been an “opportunistic” move to acquire the manager, which holds a 4 per cent stake in GQG.

“We are considering inorganic growth but we don’t need it which means we can be opportunistic. We aren’t forced into it in order to achieve scale,” he told Money Management.

“Growth for us could come from three sources: hiring an individual, doing a lift-out of a team of investment talent from another firm, or doing M&A.”

This would be a way for the firm to launch new funds outside of its existing global equities and emerging market strategies. It currently runs Global Equity, Global Quality Dividend Income and Emerging Markets Equity managed funds for Australian investors.

“I don’t think we could do any new funds with our existing team. They are at their limit, but we have a long runway of organic growth from our existing funds.”