BetaShares, the David to Goliath of the world’s three biggest fund managers with which it competes, has notched up another apparent win with the launch of the mainstream Aussie equities ETF – A200 – which has the cheapest headline fee in its category: just 7bps.
At a lively party at Sydney’s hotspot area of the moment, Barangaroo, last Thursday, BetaShares unveiled the new fund against the backdrop of announcing that it was about to pass the $5 billion mark in assets under management across its ETFs. The A200 one, which invests in the ASX 200 stocks, is BetaShares’ 45th ETF in Australia.
To put the low fee into perspective, the lowest-fee ETF available to Aussie investors at the moment is the BlackRock iShares S&P 500 ETF, which comes in at a miserly 4bps. BlackRock’s is one of the largest and most liquid ETFs in the world.
To put BetaShares’ success in perspective, the firm, which is owned by management together with South Korea’s Mirae Group, a financial services conglomerate, competes directly with the world’s three largest fund managers – BlackRock, Vanguard and State Street Global Advisors.
They each have an established ETF presence around the world. And BetaShares does, seemingly, compete well against these big companies on the smell of an oily rag.
Alex Vynokur, BetaShares chief executive, told the Barangaroo throng that he felt like a “proud father”. He said each of those 45 funds were dear to his heart. He felt that their future was “really exciting” and that the transparent nature of ETFs, as well as their low cost, meant that investors would always get the best possible deal.
He said: “The first stage of the ETF evolution in Australia was very much driven by the retail market. We believe that we are now on the cusp of a super-charged growth phase which will be driven by institutional investors.
“In ‘A200’ we have a product which will appeal to everyone. It’s the lowest priced Australian equities ETF in the world. Previously the lowest priced one was listed in New York. We though it should be in Australia. So, now we have it.”
He said, while the product itself was not that exciting, its fee structure was about half of the lowest cost of the average comparable product in the market.
“We’re giving investors a straight-forward vanilla exposure to Australian equities at the lowest possible cost.”
As a gift to the industry folk who made the journey to Barangaroo for the function, BetaShares gave each of them $100 of units in the new ETF which is expected to list on the ASX in the coming weeks.
“I hope you all allow this to work its magic of compounding,” Vynokur said. “It may take some time to build up, but I can promise you [the investment] will not be eaten away by high fees.”
Betashares is currently recruiting for a NZ business development manager.
Greg Bright is publisher of Investor Strategy News (Australia)