FILE PHOTO: A board displaying stock prices is adorned with the Australian Securities Exchange (ASX) logo in central Sydney, Australia, February 13, 2018. Picture taken February 13, 2018. REUTERS/David Gray/File Photo
MELBOURNE: Dimensional Fund Advisors is launching three actively managed exchange-traded funds (ETFs) on Australia’s main stock market to tap increasing demand from financial advisers, according to the company.
The ETFs provide access to strategies currently available as mutual funds and include global value equity, Australian value equity and global small-cap offerings. The funds complement three separate local and international stock ETFs from Dimensional already listed on the bourse operated by ASX Ltd.
The decision to launch the funds was partly driven by appetite from financial advisers, who are increasingly looking to ETFs to build client portfolios, said Bhanu Singh, Dimensional Australia’s chief executive officer.
The new funds “allow financial professionals to tailor asset allocations to meet a range of client needs,” Singh said. Actively managed ETFs can offer “the benefits of indexing – such as low costs, low turnover and high diversification – paired with the advantages of flexible implementation,” he said.
Dimensional has US$730bil under management, with more than US$50bil from clients in Australia and New Zealand.
Assets in ETFs listed on the ASX have ballooned in the past 10 years from A$12.4bil (US$8.2bil) in July 2014 to A$208.7bil last month, data from the exchange showed.
“The growth in the Australian ETF market over the last decade has been extraordinary,” said Andrew Campion, general manager of investment products at ASX.
He pointed to the rise of passive investing and the ability of ETFs to “access fast-growing markets like US-listed tech stocks” as key drivers of demand.
Dimensional ranked as the eighth-largest ETF issuer in Australia with US$3.1bil at the end of June, according to a report from Bloomberg Intelligence, lagging Vanguard Group, local fund manager BetaShares Holdings Pty, and BlackRock Inc. —Bloomberg
