Leading the charge are co-founders Cliff Man and David Tuckwell, both of whom occupied top positions at exchange-traded fund (ETF) provider Global X.
Tuckwell, who will also serve as chief investment officer at ETF Shares, was a senior product and investment strategist with Global X for more than three years, departing from the company in May 2024.
Man, who steps into the role of chief executive, was most recently head of portfolio management at Global X, having spent more than a decade with the company.
Taking to his LinkedIn on Thursday, Tuckwell wrote: “After many months in stealth mode, we are delighted to announce that we are launching ETF Shares, the first new index ETF issuer in Australia in over 10 years.
“Index ETFs are the pride of Australian financial services. Growing on a CAGR of 30 per cent the past 10 years, they’ve played protagonist in transforming the funds management and wealth industries.
“We hope our entrance will boost innovation and continue delivering better outcomes for Australian consumers.
“While our journey is just beginning, thanks a lot to those who have helped us get this far.”
Chair of the new ETF provider is Tuckwell’s father, Graham Tuckwell, who established ETF Securities Australia in 2005. ETF Securities was later acquired by Seoul-based company Mirae Asset Global Investments and Global X ETFs.
Following the acquisition, ETF Securities Australia rebranded to Global X ETFs Australia in September 2022. Tuckwell is recognised as a pioneer in the exchange-traded fund industry, notably for launching the world’s first physical gold ETF in 2003.
According to its website, ETF Shares was founded in 2024 by a group of seasoned ETF professionals.
The company describes itself as providing “new and innovative investment approaches that help Australian investors and their advisers manage their wealth”.
“A responsible entity regulated by ASIC, we are the only locally owned ETF issuer.”
Its list of employees includes Alice Chenge as data scientist and Arjun Shanker as chief revenue officer (former Global X employee).
Also taking to LinkedIn, Man said: “Around 20 years ago, I began my career at a tech start-up, building an online spreadsheet to take on the likes of Google and Microsoft. From the very beginning, I dreamed of becoming an entrepreneur.
“I’m incredibly grateful to Graham for giving us that first opportunity – to David, for sharing the journey with me – and to Arjun, who took a leap of faith to build something from the ground up with us.”
Shanker, too, shared the news on his LinkedIn profile, announcing his new role and praising his colleagues.
“I am privileged to be part of the leadership team at ETF Shares alongside the venerable Graham Tuckwell, Cliff Man and David Tuckwell.
“We have been working hard behind the scenes building some unique and compelling products and gearing up for an imminent launch. I am looking forward to connecting with clients and industry peers in the coming weeks to share our story.”
Index funds remain the industry darling
The debate between active versus passive ETFs has been reignited in recent months, with a flurry of new active ETF launches raising the question of whether these vehicles are ultimately worth it for investors.
On Wednesday, InvestorDaily reported that the hard-won reputation of index ETFs, in general, has given their active counterparts an advantage they haven’t necessarily earned.
This is according to Arian Neiron, managing director and CEO of VanEck Asia-Pacific, who said the surge in active ETFs on the ASX is less a response to investor demand and more a “push strategy” by issuers looking to capitalise on the growing popularity and asset flows into index ETFs.
He said that while the active ETF sector “looks impressive on paper”, with over 100 products and a combined total of more than $40 billion in assets, “these numbers are misleading”.
“Many of these active ETFs are not discrete products per se but are made up of units from existing unlisted managed funds,” Neiron said.
“Further, circa 75 per cent of that AUM has actually flowed into the unlisted portion of the managed funds, not the active ETFs, and therefore is not representative of the genuine demand for active ETFs in Australia.”
Meanwhile, research from Stockspot shows that while there are 50 ETF providers on the ASX, just 11 of them control 97.5 per cent of the assets, and all but three of those are index-focused.
The remaining 39 active ETF managers share just 2.5 per cent of the ETF market between them.
