Biggest is best
ETF Provider
Winner
iShares
Finalists
VanEck
Vanguard
Being the biggest in the exchange traded fund (ETF) industry has worked for iShares as it has taken out Money Management/Lonsec’s ETF Provider award.
Lonsec credited the win to the fact that iShares was backed by BlackRock, which had US$1.3 trillion ($1.76 trillion) of assets under management, and accounted for over one-third of the global ETF market share.
In Australia, iShares is the largest ETF issuer by funds under management with a 30 per cent market share through over 800 ETFs across all major asset classes and niche sectors.
Head of iShares, Jon Howie, said iShares’ biggest challenge was persuading the market that ETFs were a powerful technological tool that would help build better portfolios.
“As a firm and also as an industry we’re doing a lot to help investors understand how to maximise their efforts of ETFs in their portfolios,” he said. “We spend a lot of time educating our investors, and helping financial advisers in particular to understand how to better build portfolios for their clients.”
For finalist VanEck, their philosophy centred on the idea of offering investment solutions in the ETF format beyond the usual approach for established asset classes or new investment opportunities.
According to its managing director, Arian Neiron, there was a proliferation of active management strategies in Australian equities but VanEck believed in a passive approach to the market in equal weighting.
“Equal weighting is a strategy that is alternative weighting, you’re giving all the constituents the same weighting in a portfolio and it’s demonstrated both from our three-year track record as well as academic research,” Neiron said.
“Where investors have also gravitated towards us is in the smart beta realm. We’ve been a real pioneer in smart beta ETFs and aim to be a thought leader and innovator in that space. We’ve got the largest range of smart beta strategies.”
Being backed by broad-based, well diversified investments has propelled Vanguard forward, according to its head of ETF capital markets for Australia, Damien Sherman.
“We believe in broadly diversified investments, which mean holding many different assets within an asset class, but we’re also focused on providing all the exposure to all the different asset classes so investors can build well diversified multi-asset portfolios,” Sherman said. “That’s the core of Vanguard’s philosophy as well as a focus on low cost, and high investment returns.”
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