“ETFs have set a really good line in the Australian market in terms of the MERs they charge … overall, if they reduce the cost to invest, then that is a great outcome for investors, and that would be something that we at Vanguard would be very happy about,” Robyn Laidlaw, head of product and marketing at Vanguard, told InvestorDaily.
Vanguard, which provides an array of index funds as well as nine ETFs that the company distributes direct and on some of the major platforms, believes these securities offer investors access to broad market indices “at a very low cost”.
Despite this, the Australian market for ETFs is still small – according to a June 2013 BetaShares ETF report, it has a market capitalisation of $7.63 billion.
“[ETFs are] still a very small portion … of assets under management, in comparison to the funds market in Australia. This is traditionally a funds market and advisers are familiar with funds and how to access them and use them,” Ms Laidlaw said.
Nonetheless, according to Ms Laidlaw, Vanguard has seen interest in ETFs by the retail direct market and, in particular, those advisers working in the self-managed super fund (SMSF) space.
“This is somewhat different to the United States, where they were introduced as an institutional product to start with,” Ms Laidlaw added.
