Australian provider, BetaShares, is poised to bring competition to the NZ exchange-traded fund (ETF) market after earning a licence to operate on this side of the Tasman last week.
The managed investment scheme (MIS) licence approval comes just a couple of weeks after BetaShares NZ head, Thom Bentley, resigned the firm.
But the MIS licence marks an important step forward for BetaShares, which has long signaled ambitions to develop portfolio investment entity (PIE) products for the NZ market.
Currently, only the NZX-owned Smartshares offers locally domiciled ETFs, which can be more tax-effective while managing other risks such as currency volatility.
Alex Vynokur, BetaShares founder, said while a “significant number” of NZ financial advisers and investors already used the manager’s ASX-listed ETFs, “this latest welcome development will allow us to expand both our product range and capability in the growing Kiwi market”.
“During our ongoing and regular conversations with local financial advisers and investors, we’ve identified a clear need for a greater range of transparent and convenient investment solutions that will allow Kiwis from all walks of life to progress on their financial goals,” Vynokur said.
“To that end, our recent investments in this important market will allow us to continue our plans to make a range of innovative, cost-effective, and well-constructed PIE funds available to local investors. We look forward to completing work on bringing an initial range of investment solutions to the New Zealand market in the near future.”
BetaShares was originally targeting a late NZ fund launch – likely to start with ‘vanilla’ stock index products rather than the more exotic theme-based ETFs the firm has rolled-out in Australia of late.
However, the surprise exit of Bentley, expected to surface with another Australian investment firm soon, may have delayed the BetaShares NZ release schedule.
Peter Harper, BetaShares head of distribution and capital markets, said a recruitment process for the NZ country lead role was already underway.
“As part of this work, we’ve already started conversations with a number of high-quality candidates to fill this important role in our growing business,” Harper said. “Applications for the senior role are still open, so any interested candidates should get in touch with us as soon as possible.”
BetaShares has about A$22 billion under management across a product suite of more than 60 funds compared to the NZ$5.7 billion reported in the Smartshares range of almost 40 ETFs as at the end of August.
The FMA now lists 70 MIS managers with BetaShares only the second approved by the regulator this year after Kiwi Wealth Investments Limited Partnership was licensed in June. Kiwi Wealth is now part of the Fisher Funds empire.