Global X issues low-cost Australian equity ETF

Global X has added to its existing range of low-cost exchange traded funds (ETFs), this time with a product targeting the top 300 Australian companies listed on the Australian Securities Exchange (ASX).

The ETF provider said the decision to bring an Australian equity-focused product to market was driven by the increase in investor appetite, citing over $21 billion in inflows into Australian-listed ETFs across the calendar year to June 30 and 20 per cent of them directed to low-cost products.

“While we are still seeing significant investment money flowing into global equity and US equity ETFs with $3.1 billion and $1.2 billion in new flows year to date respectively, Australians still have a bias to investing in Australian assets,” Alex Zaika, CEO at Global X ETFs Australia, said.

“Low-cost broad-based Australian equity ETFs have been the most popular category, seeing $3.9 billion in net flows this year, bringing their total assets to over $43 billion and accounting for around 16% of the ETF market.

“Global X plans to further broaden our range in a bid to become relevant to more investors; we want to be part of every Australian’s investment portfolio.

“Our fifth product launch of the year is a low-cost Australian Equity ETF that will provide exposure to the top 300 Australian companies on the ASX.”

Zaika also confirmed forecasts remained at $300 billion for the Australian ETF industry to hit by the end of the year, at the same time as investors pivot away from the US’ instability and the global ripple effects.

“The ETF industry is growing rapidly, as more Australians adopt ETFs to build investment portfolios at a lower cost. The adoption of ETFs has helped to push Global X’s AUM to over $11 billion and we expect to exceed $12 billion by the year’s end,” he said.

“We plan to double down on what we’re known for – leading thematic and innovative ETFs backed by best-in-class research – while expanding into lower-cost core exposures to provide Australian investors with more choice.

“However, for portfolios to be balanced and well diversified, they should have a good representation of overseas and Australian shares. Our current product lineup features a range of ETFs targeting international markets, but we also understand the importance of meeting investor demand for more domestic equity ETFs.”