Vinnie Wadhera and Ilan Israelstam, BetaShares. Photo: Matt Fatches
Category: Exchange-traded funds (ETFs)
Winner: BetaShares Capital
Analyst: Dug Higgins
Sector overview:
The increasing popularity and evolution of these vehicles has seen the market grow strongly over the past five years. The sector continues to expand in terms of product range and assets under management. The sector reached a market capitalisation in excess of $23 billion in July 2016, up more than 17 per cent on the previous year. The rapid rise of Active strategies available in an ETF format coupled with further expansion in Alternative Beta products is making Exchange Traded Products even more attractive to those seeking greater flexibility around accessibility and pricing points for investment strategies.
Zenith says …
With a large, dedicated Australian ETF team and a diverse product menu, BetaShares has carved out an enviable record in the local ETF landscape in terms of product innovation and support. High levels of product proliferation for its own sake is a contentious global issue in ETFs. However, BetaShares’ commitment to quality, in terms of product design and innovation to find solutions for changing market conditions, has been exemplary. BetaShares has continued to build on its position with its product suite continuing to evolve, particularly in the area of managed risk strategies in an ETF format.
Interview
Ilan Israelstam
Head of strategy and marketing
Betashares
The ETF industry is an exciting industry to be in. It’s growing extremely fast. We think the growth rate in the past three years has been 50 per cent a year. On the demand side, self-managed super funds in particular have been a big supporter, as have financial advisers following the FoFA reforms. It’s meant we’re on a level playing field with other fund managers.
Because maturity has increased, so has the product suite. We think that, increasingly, investors are looking for thematic ideas. In recent times we’ve launched the largest range of global sector themes – our cyber security fund, a global healthcare fund – and we’ve found a lot of interest across the board. There’s going to be continued growth, and I would break it out into three categories. There’s ETFs 1.0, which are the index-tracking funds, and those will continue to grow – this is part of the whole active-versus-passive debate. ETFs 2.0 are going to be the fastest growing area – the smart beta, rules-based, but not quite index-tracking, funds. But where it’s really headed is 3.0 – the active exchange-traded products. We were the first group to do an alliance, with AMP Capital, to launch a range of exchange-traded funds that are actively managed, and that’s a whole other growth area of the industry.
