BNP pioneers active ETFs in Australia
BNP Paribas has rolled out Australia’s first active exchange traded funds (ETF).
The four funds are not only a first for Australia, but the first active ETFs in the world outside of Europe. In November last year Dutch based Die Wertpapier Spezialisten (DWS), an investment arm of the Deutsche Bank Group launched 11 active funds.
ETFs are funds that trade like a stock. Each fund holds a group of stocks, much like a managed fund, but ETF prices are updated as they trade and the management fees are generally lower.
BNP Parisbas Asset Management managing director Alan Beasley says the launch of the funds bring a new direction for the group - a presence in the retail market.
Beasley says despite the introduction of the new funds the structure of the group will stay relatively the same, with the new funds being pooled in with BNP's existing unlisted wholesale funds.
The four funds are BNP Paribas Access Australian equity fund, BNP Paribas Access Australian Small Company fund, BNP Paribas Access Global equity fund and BNP Paribas Access diversified fund.
"We didn't wait for the BTs or the Colonial First states to launch something because we're not sure if the larger retail business could launch something like this. It could cannibalise their listed retail trust business," Beasley says.
"We wanted to be innovative, provide clarity, certainty, liquidity and comfort for retail investors," he says.
According to Beasley it is difficult to switch portfolios in less than a few weeks, however these funds, with its direct access could switch in about five days.
BNP Paribas started discussing its ETF proposal with advisers and research houses more than a year ago.
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