More offshore issuers of exchange-traded funds (ETF) will come to Australia, a former co-head of iShares has said.
“As the market gets bigger and the opportunity becomes realised, there will be more issuers who want to come to town,” ETF Consulting principal Tim Bradbury said.
“People who are issuing in other parts of the world who think the Australian market sounds interesting, that it’s well-mandated and well-regulated, might think see opportunity here, but they might need someone to help them with a market-entry study, understanding the dynamics, and identifying the benefits and challenges of being here.”
ETFs are funds that can be traded like stocks and are designed to track indices such as the S&P/ASX 200 or US S&P 500. They can also track commodities, such as gold, with others, including fixed interest, set for release.
“There is vastly increasing usage of ETFs but there’s also more interest around ETFs – how to use them, how to actually customise them for a particular business, whether that be an adviser or an issuer,” Bradbury said.
“There’s a great demand for information, and I didn’t see anybody pulling all those pieces of information into a cohesive package.”
Their popularity has grown amid investor concern over prolonged volitality in financial markets and over high costs charged by active fund managers – often as the performance of their funds waned.
Bradbury, who left Blackrock-owned iShares nearly a year ago, said his company aimed to offer consulting services to advisers, dealers and institutions on which ETFs might be suitable in certain situations, and also offered training services to ensure companies using ETFs were compliant.
“I plan to fill that gap that says ‘I can give the full industry perspective’,” he said.
“There are a lot of companies out there that can talk about product, but there isn’t anyone out there to say ‘this is how you should think of ETFs for your adviser business’ or ‘this is how your adviser may wish to sell the concept to their client’.”
