Vanguard Australia ETFs surpass $100m

Strong demand from SMSFs

By Vishal Teckchandani
Wed 24 Feb 2010

Vanguard's local ETFs have passed the $100 million mark on the back of strong demand from investors, particularly SMSFs.

Vanguard Investments Australia said its local suite of exchange-traded funds (ETF) have surpassed $100 million under management.

The company's three ETFs track the S&P/ASX 300 Index, the MSCI United States Broad Market Index and the FTSE All-World ex-US Index. They were launched in May 2009.

"The most pleasing aspect of the uptake of Vanguard ETFs is that it shows that a growing number of investors and their advisers are appreciating the portfolio benefits of indexing and the flexibility ETFs offer," Vanguard ETF product manager Robyn Laidlaw said.

"In 2009 we saw strong demand from investors - in particular those with SMSFs (self-managed superannuation funds) - who used ETFs to create a core equity allocation within their portfolio. We expect this trend to continue in 2010."

The market capitalisation of ETFs listed on the local market surged 140.9 per cent to $2.93 billion in the 12 months to January 2010, Australian Securities Exchange (ASX) statistics show.

There are currently 25 ETFs listed on the ASX by providers including State Street Global Advisors, iShares and Vanguard.

Australian Index Investments (Aii), a subsidiary of Eurofinance Group, will launch a series of new ETFs over the next three months.

The company is preparing to issue ETFs that will track the S&P/ASX 200 Financials Index excluding Australian real estate investment trusts, the S&P/ASX 200 Energy Index, the S&P/ASX 200 Financials Index, the S&P/ASX 200 Industrials Index, the S&P/ASX 200 Resources Index and the S&P/ASX 300 Metals and Mining Index.

ETFs trade exactly like stocks and are generally designed to track the performance of an index.

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