ETFs will eventually take off, says Tria
Despite recent data to the contrary, Tria Investment Partners managing director Andrew Baker believes exchange-traded funds (ETFs) are playing into a particularly positive environment.
Baker said a world of unbundled product commissions, advisers being under pressure to lower costs and less concessionally taxed super would create perfect conditions to take ETFs into the mainstream.
Baker’s comments come despite evidence showing Australian advisers are not picking up on ETFs, with most of their popularity being positioned with non-advised self-managed super fund investors.
“We do admit it is still early days, but all the anecdotal evidence is showing an increasing number of advisers trying to work out how to use ETFs,” said Baker.
“Most [advisers] make their investments through platforms, and platforms are in the process of upgrading their equity capabilities,” he added.
The size of the ETF category is around $3 billion in a $1 trillion market, but Tria research shows ETF assets grew by more than 60 per cent.
Baker also noted recent clarifications regarding the way in which gearing in super would work — further adding to the ETF category.
“Gearing in super is complicated for equities. You need separate borrowing for each security. If you’re after a diversified portfolio, ETF is going to make gearing in super much simpler,” said Baker.
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
