Funds management business, Superlife, has tipped in about $60 million to kick-start three new exchange-traded funds (ETFs) launched by its parent NZX late last month.
In February Superlife seeded two other new NZX ETFs – both built around Australian indices – with a total $90 million.
Sam Stanley, NZX head of exchange products, said Superlife had invested about $20 million in each of the just-released ETFs: the NZ Dividend, Australian Financials and Australian Resources funds.
Stanley said while Superlife was the main investor to date in all five of the recently-launched NZX ETFs, other investors would follow.
“They will grow beyond Superlife,” he said. “As the ETFs get more scale and we launch more products, we expect advisers and brokers will see the benefit of using them as asset allocation building blocks.”
With the five new products, all launched within the last four months, the NZX now boasts 10 ETFs in its palette.
According to Stanley, the NZX plans to release a few more ETFs this year with plenty of others in the pipeline.
“Based on overseas trends, there’s lot of scope to launch new ETFs in New Zealand without saturating the market,” he said.
To date, the NZX ETFs have mainly attracted retail investors (with the exception of Superlife) but Stanley said institutional clients would be interested as the products increased in diversity and scale.
“Fees should also be able to reduce as scale increases,” Stanley said. “That’s been the experience offshore.”
The NZX bought Superlife last December for $20 million with a further $15 million dependent on the firm meeting earn-out targets over the next three years. Superlife has about $1.2 billion in its NZX-owned superannuation and KiwiSaver schemes, most of which it invests passively.
Traditionally, Superlife has invested in NZ shares directly but it uses a variety of external passive managers – including Vanguard, State Street and Blackrock-owned ETF firm iShares – to access other asset classes.