ETF Consulting tips more market diversity
This year will see a range of new exchange-traded funds (ETFs) released to the Australian market as well an increase in the number of ETF providers, according to ETF Consulting.
More than 20 new ETFs are likely to be released to the Australian Securities Exchange (ASX) this year on top of the current 61 on offer in what will be a very active year for the industry, with a shift away from the focus on equities-based ETFs, the firm stated.
"We expect to see more dramatic growth and change, with stiffer competition, lowered fees, more product launches, consolidation, and the potential for more regulatory influence," ETF Consulting chief executive Tim Bradbury wrote in an ETF outlook report.
BlackRock has already flagged the imminent release of several fixed income ETFs, and ETF Consulting said a large selection of fixed interest ETFs will hit the market in a flurry of activity soon, with each major issuer planning to introduce a selection of bond-backed ETFs.
"This will fill the last big gap in asset classes offered and spark renewed interest in the ETF sector," Bradbury said.
There will be more commodities offerings, which could pose an issue for regulators as many commodities require a derivative-style ETF, he said.
Fund managers with traditional managed funds outside the ETF sector are likely to make use of recent ASX rule changes to bring new styles of funds to market, he added.
"As pooled fund managers watch asset flow trends internationally, and as they seek ways to tap the significant self-managed superannuation fund market, they will realise recent ASX developments are worth investigating," he said.
For a locally domiciled asset manager with much of the required infrastructure already in place the barriers to entry are even lower, he added.
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