State Street Global Advisors (SSgA) expects increased take-up of exchange-traded funds (ETF) by fund managers and institutional investors as the product's popularity grows in Australia.
"We see this product being relevant to a large number of customers," the firm's newly-appointed head of ETFs for Asia Pacific Frank Henze told Investor Weekly.
"Sometimes I feel when I'm in Australia that it's a little bit typecast as a retail product. You will see a lot of take up from asset managers, multi-managers, funds-of-funds, the entire product production segment for retail customers."
Henze said that institutional investors will also increasingly use them in a transactional or transitional capacity.
"There are a lot of applications such as cash equitisations, through transitions management and through tactical overlays, where ETFs and the [SSgA] SPDR ETFs will be very successful," he said.
"And that's not dissimilar to any other market. If you look at Europe and you look at the United States it's exactly the same approach and pattern and you will see the same here.
"So it's not a product for just the one market segment, it is an enabling tool for the entire investment space."
Henze also said that SSgA did not plan to reduce the fees on its ETFs after its rivals introduced similar and cheaper broad market and property securities funds last year.
"Our prices are a fair reflection of the quality and the value we bring to the investor. I have no plan of reducing the price," he said.
