When compared to the United States, the number of ETFs available on the Australian Securities Exchange to Australian investors has to date been quite limited.
“It is at an embryonic phase [in Australia]...the key thing is where we are at in terms of the industry life cycle...We have a firm belief that this is the point in the curve where the ETF industry will start to grow,” Arian Neiron, managing director of Market Vectors Australia, told InvestorDaily.
Mr Neiron has just taken up a position overseeing the company’s ETF product and distribution efforts in Australia, and believes the changing legislative environment and increasing number of SMSFs being set up will spur demand for these products.
“I actually think it is an ideal time now with the reforms that have come through with [Future of Financial Advice] and MySuper, as well as with SMSFs growing exponentially,” he said.
Mr Neiron conceded, however, that this is a “structural story” that will unroll over many years rather than overnight.
The firm believes these investment vehicles provide an “innovative solution” to many clients’ needs, giving them the ability to have transparent, liquid and diversified investments, which is “the crux of the ETF value proposition”, Mr Neiron said.
The company's Frankfurt-based index business, Market Vectors Index Solutions, which creates indices for ETF clients said it is set to expand what is on offer to the Australian market.
“The ETFs we will be launching will be purpose-built ETFs...and all ETFs we will be doing will be Australian dollar-denominated,” Mr Neiron said.
