The addition of core and alternative asset classes to the Australian exchange-traded fund (ETF) universe will result in a complete product suite by the end of 2012, a number of ETF providers have said.
“More ETFs available in the market is good for investors,” Russell Investments director of ETF product development Amanda Skelly said.
“The great thing that any ETF provider is doing is that they’re introducing ETFs that are different to what investors can currently get [and] greater choice for the investor is a good thing.
“What we’re looking to do is really build out ETFs that have a very clear role in a broader investor portfolio and that’s really in line with what we’ve done historically.”
Skelly said Russell had identified an opportunity in bond ETFs, given the uncertain equity market volatility, and planned to launch a fund early next year.
BetaShares head of investment strategy Drew Corbett said the business planned to increase the “manual of options” available for investors in the ETF market, starting with the recent launch of a crude oil ETF, the first in Australia.
“Oil is one of the most traded commodities on the globe and by listing [our] ETF, we’ve given access to all investors through being able to trade on the [Australian Securities Exchange],” Corbett said.
“We’re filling out the commodities suite for the alternatives section of the portfolio. I think the key thing there is that overseas, generally, institutional portfolios are between 1 to 15 per cent in commodities, so it’s becoming a more core diversified portfolio allocation.”
He said BetaShares had numerous products in the development pipeline in consideration for release in the new year, including fixed income and currency hedged commodity products.
Australia was still in the process of providing core and alternative asset classes to the market, highlighting that a lot more work could be done within international equities, he said.
“The key thing is that we are focused on products that are tailored to Australian portfolios that do provide access,” he said.
“What traditionally has only been available to institutions is now available to advisers and self-managed super fund portfolios so that they’ve got low-cost, ease-of-use products to build institutional-style portfolios.”
IShares head of intermediary sales Tom Keenan said while the firm did not have plans to list a commodity ETF in the near term, new ETFs brought to market were a positive outcome for investor choice.
“We welcome the addition of more ETF building blocks for Australian investors and they should expect to see more,” Keenan said.
“ETF providers are aware of the competitive dynamic in the market and we’re all aware of what types of exposure different ETF providers typically bring to market.”
