Australia's exchange traded funds (ETF) market boom is set to continue with the sector poised to surpass $17 billion by 2015, according to ETF Consulting.
Research from ETF Consulting found that total assets under management (AUM) within the Australian ETF sector is likely to reach more than $9 billion at the end of this year and more than $17 billion by 2015.
"ETFs have been around in Australia for quite a while, there just haven't been very many of them," ETF Consulting managing director Tim Bradbury told InvestorDaily.
"But now there is a much, much louder voice around ETFs, which has led to more eyes looking at them and to increasing AUM.
"The recent and forecast growth is supported by a range of factors, including unbundling of advice services and fees, regulatory change/FOFA, increasing ETF knowledge, a continued shift 'on exchange,' as well as the pending wave of accounting looking to provide self-managed super fund solutions to their clients."
ETF Consulting said that 2013 has already seen a further 10 per cent of growth in the sector and noted there were 95 funds from nine issuers across six asset classes available domestically as of December last year.
Mr Bradbury said that the ETF market in Australia is starting at a lower base than other developed countries due to limited product availability, advice business models being biased towards active funds and the slowed momentum of the global financial crisis (GFC).
However, he said issuers have noticed the opportunities in the domestic market for ETFs, which has led to an increased take-up of the products.
"Issuers see the opportunity partly because Australia is a well regulated place, partly because it has baked-in growth through superannuation," Mr Bradbury said.
"Being an early mover into the ETF space has paid dividends and we've seen that around the world."
