ETFs, Investments

ETF market will continue to broaden

ETF S&P Global

Gaps in the domestic ETF market have been recognised and efforts to fill them are being made and will continue to be made in the future.

Exchange-traded fund (ETF) stakeholders have acknowledged there are still plenty of gaps in the Australian market these types of products can fill for investors in the future.

Speaking on a panel at the Stockbrokers and Investment Advisers Association 2024 Conference held in Melbourne recently, S&P Global channel management director Julie Ballard recognised the majority of ETFs currently on the Australian Securities Exchange (ASX) cover equities, both domestic and global, indicating there is greater room for development among product providers.

To this end, Ballard cited the number of indices S&P currently provides as an indication of the potential for future ETF direction.

“We actually manage 1 million indices globally. Not all of them are backed by ETFs and not all of them should be backed by ETFs. [But] if you talk more specifically about Australia and the ASX, we’ve launched an agribusiness index, but we don’t actually have an ETF backing it at this stage,” she told delegates.

She identified another area of the market product providers such as S&P might consider for expansion in the coming years based on worldwide interest.

“We’ve launched Sharia [indices] as that is a trend we’ve seen globally and we’re actually quite big in providing these indices in other parts of the globe, but there is not an S&P Sharia ETF at this point,” she said.

Fellow panellist Blackrock director Tamara Haban-Beer Stats noted the recent actions of her organisation indicated efforts to fill gaps in the market are already underway and signalled the asset classes to which product providers are looking to provide investor access.

“Looking at our own range [of ETFs], we’ve been quite active in developing new products. We’ve listed six new products in the last 18 months, including things like US Treasury exposure, infrastructure exposure, global property exposure and physical gold backed by actual bullion,” Haban-Beer Stats said.

“So it feels like we’ve been pretty prolific in developing [product already].”


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