Market Vectors ETFs, the exchange traded fund business of US-based investment manager Van Eck Global, has listed four purpose-built Australian ETFs on the Australian Securities Exchange (ASX).
According to Market Vectors, two new ETFs, Australian Banks ETF and Australian Emerging Resources ETF, offer first-ever access to the Australian banking and small-cap resources sectors through an ASX-listed ETF, while the other two ETFs, Australian Property ETF and Australian Resources ETF, also commenced trading.
Arian Neiron, managing director of Market Vectors Australia, said that each ETF is based on the firm’s purpose-built pure play index, which aims to provide better liquidity, tradability and diversification while reducing stock concentration issues that are typical of some ETFs based on traditional indices.
Neiron added that Australia’s ETP industry will continue to grow on a similar growth trajectory it has experienced in recent years.
"Several factors have changed the landscape for ETFs in the past few years: Future of Finance (FoFA) reforms banning conflicted remuneration to advisers; investor demands for lower costs, transparency and liquidity; investors opting for a Self-Managed Superannuation Fund (SMSF); and a trend among investors towards direct investments. All of these factors have favored a shift towards ETFs.
"We believe higher demand will come from SMSFs, the fastest growing segment of the superannuation sector with about A$500 billion in assets, attracted by the ease of diversifying their portfolios without having to pick stocks," Neiron said.