The fund manager has made plans to launch three Australian equities exchange-traded funds (ETF) amid expectations of strong growth in ETF usage by local investors.
Head of retail in Australia Robin Bowerman said it would differentiate itself from competitors offering similar ETFs on price and its long history of low tracking error.
The products will track market sectors including small companies, large cap stocks and high yield equities, head of product development and management in Australia Robyn Laidlaw said.
A high yield ETF would be a class of units of the unlisted Vanguard Australian Shares High Yield Fund, which began in 2004.
“This is another step to deliver a low cost range of index-based ETFs for Australian investors and these new funds have been developed in line with our product development philosophy which is based on diversification and cost efficiency,” Laidlaw said.
“In Australia, the ETF market is developing quickly as investors and advisers gain familiarity with these funds and realise their benefits, and as more choice is introduced to the market.”
The fund manager’s intention to launch new ETFs comes as manufacturers project an increase in appetite for low-cost listed passive funds from financial planners, self-managed superannuation funds and institutional investors.
Russell Investments forecast the Australian ETF sector’s assets would rise to $6 billion by the end of 2011, while State Street Global Advisors has projected the market would boom to $35 billion by 2015.
The Australian ETF market had $4.67 billion in funds under management as at March.
Vanguard’s new funds are expected to start trading on the Australian Securities Exchange at the end of May.
