BetaShares and Legg Mason have jointly launched two active ETFs on the ASX, a collaboration they say signals an end to the antagonism between active and passive managers.
The two firms formally launched the BetaShares Legg Mason Equity Income Fund (ASX: EINC) and BetaShares Legg Mason Real Income Fund (ASX: RINC) yesterday, both of which are managed by Legg Mason affiliate Martin Currie and began trading on the exchange this week.
At a listing ceremony at the ASX headquarters in Sydney, BetaShares managing director Alex Vynokur thanked his new strategic partner and said collaboration between active and passive managers is a trend likely to continue.
“We have been passionate about index investing for a long time, but ultimately our belief is that investors have choice and that includes active investment tools,” Mr Vynokur said.
“For many years the debate has really been a very antagonistic one. Passive managers have sought to talk down the active management industry and similarly, active managers are pointing to the gaps of what passive can offer.”
The growing popularity of listed products stems from fundamental changes in investor technology and culture, said Mr Vynokur, who was recently described by the ASX’s custom publication as the “far from passive ETF king”.
“From the perspective of BetaShares, the true innovation is the access to the customer. The ability to deliver to the customer an investment outcome in a cost-effective, simple way which really aligns with the way that people are investing in this century as opposed to centuries before.
“The idea of filling out a lengthy application form and PDS or signing up to an expensive platform in order to access an investment strategy … I think those days are well and truly over.”
Legg Mason Australia managing director Andy Sowerby said the partnership makes use of cutting-edge product innovation, but emphasised the company he leads will stay true to its traditional approach.
“We are unashamedly an active manager,” Mr Sowerby said. “We believe we can add real tangible value.”
However, he said the partnership would open new distribution channels for Legg Mason and make its management capabilities accessible to a “wide range of potential investors”.
The two companies plan to jointly launch further products on the ASX in 2018.