AMP Capital has ended its brief foray in the exchange-traded fund (ETF) market, sounding the closing bell for its three ASX-listed actively managed products last week.
The three AMP Capital ETFs – backed by Sydney-based BetaShares as responsible entity – will wind up on December 31 after gathering just over A$55 million over their four-year history.
In a release to the ASX, AMP Capital says the decision to bin the ETFs “follows mutual acknowledgement by BetaShares… that funds have not achieved sufficient scale since inception”.
“Investors may obtain exposure to similar investment strategies made available via AMP Capital’s non ASX-listed funds,” the release says.
The manager’s ETF suite covers infrastructure, global property and hedge fund investment styles that respectively garnered funds under management of A$28 million, A$22 million and A$5.5 million.
AMP Capital’s ASX-listed parent company is currently subject to a takeover bid from US alternative investment firm, Ares Management.
At the same time, BetaShares has closed two of its own-branded ETFs that invest in agriculture and commodities assets, respectively.
But the rash of product closures hasn’t slowed down the BetaShares ETF machine with five new funds flagged for release by the first quarter of next year.
In its latest quarterly review of the sector, BetaShares notes that challenger brands were struggling to gain a foothold despite strong growth in the global ETF sector that saw assets under management tip briefly above US$7 trillion in August.
“The three largest issuers in the market now account for more than 80% of all ETF assets, and 70% of [assets under management] AuM are held in funds launched more than 10 years ago,” the BetaShares report says. “During September 2020, of the ~$60B of inflows into global ETFs/ETPs, ~$36B (~60%) went into just 20 ETFs. One U.S. equities S&P 500 ETF gathered $3.9B alone.”
According to the report, just under 180 new ETFs listed globally in the first three quarters of 2020, setting the industry on track for its lowest launch numbers in about six years.
“Meanwhile, there have been more than 130 fund liquidations, already the most ever in a calendar year,” the BetaShares analysis says.
Aside from the AMP Capital and BetaShares ETF closures, the ASX has seen over 10 other products exit this year, including nine previously offered by UBS.
In NZ, however, the NZX-listed Smartshares ETF suite is growing apace, hitting almost $4 billion as at the end of October, new figures from the stock exchange show.
External clients now account for over $1.6 billion, or about 42 per cent, of Smartshares ETF assets, equating to year-on-year growth of 33 per cent. While the bulk of Smartshares ETF money is still linked to in-house SuperLife KiwiSaver and superannuation funds, the external client sector has been growing at a relatively faster pace over the last couple of years.
Smartshares offers 35 ETFs either managed in-house or invested into other vehicles driven by Vanguard and BlackRock. In total, Smartshares (including SuperLife other assets) reported almost $4.6 billion under management as at the end of October.
Despite the rise in Smartshares assets under management, NZX fund revenue in the September quarter of $3.3 million was flat year-on-year, according to results released last week, as a “revenue increase was partially offset by a historic pricing provision”.
However, Wealth Technologies, the NZX investment platform, booked quarterly revenue of $544,000, the report says, or an increase of almost 27 per cent compared to the same period in 2019. As at the end of October, Wealth Technologies recorded funds under administration of almost $3.3 billion, up almost 50 per cent year-on-year, with a further $6 billion or so in the queue as Hobson Wealth and Saturn Wealth move across from MMC Wealth (formerly known as Aegis).
Last week, the NZX also named Natalia Roum in a newly established business development role. Roum would lead the Wealth Technologies sales and marketing while also building relationships with financial advisers and other clients.
She has held similar sales positions with ANZ, BNZ and AMP as well as a six-year career in Russia.