Australian investors are unlikely to benefit from the expanding stable of actively managed ETFs in the US, potentially compounding opinion that the tool's use holds limited appeal for local instos.
State Street's recent launch of three new products takes the total number of actively managed exchange traded funds (ETFs) in the US to 47, holding 10% of assets but attracting 50% of new funds, according to figures from Yahoo Finance.
The expansion has been accompanied by commentary on the potential of actively managed ETFs to challenge mutual funds in the US due to subsequent liquidity, transparency and tax efficiency in that jurisdiction.
State Street however, has said that any introduction of actively managed ETFs to the Australian market will lag the US.
"There are no immediate plans to launch actively managed funds listed in Australia. We are, however, constantly reviewing our ETF offering in response to investor demand to improve access to a wide range of asset classes," said Frank Henze, head of SPDR ETFs for Asia-Pacific at SSgA.
The news may further contribute to the lacklustre enthusiasm for ETFs from Australian instos that has led to the tool being largely aimed at the retail market locally.
"Institutional investors here have been able to buy through separately managed accounts or mandates low cost index funds directly so, while we expect the institutional market in ETFs will develop, the early adopters have been in the retail space," Robin Bowerman, Vanguard's principal of corporate affairs and market development recently told Financial Standard.
Research conducted by Deloitte on behalf of Russell Investments in 2011 found that institutions in Australia used ETFs only in a small way, with many that were using the instrument focusing on listings in the US due to market depth and liquidity.
Actively managed ETFs allow managers to change sector allocations, market-time trades or deviate from the benchmark index as they see fit, thereby producing returns that may deviate from the underlying index.