Get A Slice Of The Action
Money Magazine Australia|November 2019
Investors are pouring billions of dollars into ETFs that aim to beat their passive peers
Pam Walkley
Get A Slice Of The Action

The rise of exchange-traded funds (ETFs) has democratized investing. Now a retail investor like you or me can get global diversification (previously only available to large institutional investors) in a single trade.

In the 26 years since ETFs launched in the US, they have become one of the most popular investment vehicles for both institutions and individuals.

In Australia, ETFs were launched 18 years ago. The local exchange-traded product (ETP) market – financial products traded on the Australian Securities Exchange (ASX), including ETFs, managed funds and structured products – exceeded $54 billion in market capitalization at August 2019, says Alva Devoy, Australian managing director at Fidelity International.

She says the ETF sector has steadily grown over the past six years and retail investors have helped drive the investment vehicle’s popularity.

In 2030, ETPs in Australia are expected to have about $600 billion in funds under management, representing 12% of the broad market, according to estimates from researcher Rainmaker Information.

Originally, ETFs were passive investments, designed to mimic an index focused on equities, fixed income or a blend of asset classes. Active ETFs, which aim to outperform their index by engaging the services of a portfolio manager, were only introduced into Australia in 2015.

Devoy says ASX trends showed that 50% of new ETF trades were active ETFs in the 2018 calendar year.

“There were 41 active ETFs at end August 2019 with $4.5 billion in funds under management,” she says.

Both active and smart beta (see a breakout, right) segments have grown at around 70% a year for the past three years, says Rainmaker.

State of play

Denne historien er fra November 2019-utgaven av Money Magazine Australia.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra November 2019-utgaven av Money Magazine Australia.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA MONEY MAGAZINE AUSTRALIASe alt
An outrageous, beautiful monopoly
Money Magazine Australia

An outrageous, beautiful monopoly

Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.

time-read
4 mins  |
July 2024
Drop the anchor to judge value
Money Magazine Australia

Drop the anchor to judge value

Buying and selling decisions should be based on where a stock price is going, not where it has been.

time-read
3 mins  |
July 2024
Powering the AI boom
Money Magazine Australia

Powering the AI boom

Beyond the software and chipmakers, where will the energy come from?

time-read
3 mins  |
July 2024
Get into life
Money Magazine Australia

Get into life

Tucked inside super are products that can protect you from life's inevitable uncertainties.

time-read
5 mins  |
July 2024
Paths to home ownership
Money Magazine Australia

Paths to home ownership

Taking the road less travelled can sometimes deliver unexpected benefits.

time-read
5 mins  |
July 2024
Sold! Quick ways to add value
Money Magazine Australia

Sold! Quick ways to add value

Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.

time-read
5 mins  |
July 2024
Money lessons the kids need to know
Money Magazine Australia

Money lessons the kids need to know

Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.

time-read
4 mins  |
July 2024
Property-investing rules: are they likely to change?
Money Magazine Australia

Property-investing rules: are they likely to change?

The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.

time-read
3 mins  |
July 2024
What's love got to do with it?
Money Magazine Australia

What's love got to do with it?

A rollercoaster of emotions could be driving poor crypto behaviour.

time-read
3 mins  |
July 2024
Are we ready to be cash-free?
Money Magazine Australia

Are we ready to be cash-free?

Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.

time-read
2 mins  |
July 2024