- Dimensional Fund Advisors has launched three new actively managed ETFs in Australia, targeting global and local equity markets.
- The move continued a decade-long surge in ETF investment, which has grown from $8.2 billion in 2014 to $208.7 billion in recent years.
OUR TAKE
Dimensional Fund Advisors has expanded its offering in Australia with the launch of three new actively managed exchange traded funds (ETFs). The ETFs, which focus on global value equity, Australian value equity and global small cap strategies, mirror the firm’s existing mutual funds. The move comes in response to growing demand from financial advisers seeking diversified investment options for their clients. As someone who closely follows market trends, it’s clear that Dimensional is strategically positioning itself in a fast-growing sector where assets in Australian-listed ETFs have grown dramatically over the past decade.
–Heidi Luo, BTW reporter
What happened
Dimensional Fund Advisors has launched three new actively managed exchange-traded funds (ETFs) on the Australian Stock Exchange, in response to growing demand from financial advisors.
The funds, which focus on global value equity, Australian value equity and global small cap strategies, mirror Dimensional’s existing mutual fund offerings. The ASX-listed ETFs are designed to provide investors with sophisticated asset allocation tools previously only available through more traditional mutual fund investments.
The launch is part of Dimensional’s strategic response to the growing interest in ETFs among Australian financial professionals. Bhanu Singh, CEO of Dimensional Australia, said the new offerings are designed to give financial advisors greater flexibility to tailor asset allocations to meet the diverse needs of their clients.
The ETFs are designed to combine the benefits of indexing, such as low costs and high diversification, with the advantages of active fund management. This initiative comes at a time when the ETF market in Australia has experienced explosive growth, with assets rising to $208.7 billion from $8.2 billion in July 2014.
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Why it’s important
Andrew Campion, General Manager of Investment Products at the ASX, highlighted the remarkable expansion of the Australian ETF market over the past decade. He attributed the growth to the increasing popularity of passive investing and the ability of ETFs to tap into fast-growing markets such as US-listed technology stocks.
At the end of June, Dimensional was identified as the eighth largest ETF issuer in Australia, with $3.1 billion in assets under management. That puts it behind industry leaders such as The Vanguard Group, local fund manager BetaShares Holdings Pty and BlackRock Inc, according to Bloomberg Intelligence.
Bloomberg Intelligence analysts Rebecca Sin and Eric Balchunas expect the introduction of more active ETFs to continue to attract investment to Australia. They noted that the launch of Dimensional’s three new funds, which offer strategies previously available only in mutual funds, could lead to an increase in similar dual-class offerings as investor interest in actively managed funds grows.
