Global X scales higher on the ETF issuer podium

Global X has climbed the ranks of Australia's largest ETF issuers, overtaking State Street, having vaulted its assets under management (AUM) past the $10 billion mark.

Global X chief executive Alex Zaika said the firm has leapfrogged State Street and cemented its position as one of Australia's fastest growing ETF issuers.

"The ETF industry is on track for its busiest year, fuelled by record flows of $19.2 billion as at the end of May, with growing interest in ETFs," Zaika said.

"This has helped boost Global X's AUM to grow to more than $10 billion, as more investors turn to lower-cost index investments to build wealth."

Zaika noted the $10 billion milestone was achieved in under three years since entering the local market, and that the firm is now aiming to double its AUM to $20 billion by 2027.

The firm has also onboarded over 18,000 new investors since the start of this year.

Global X forecast that the Australian ETF market to hit $300 billion by year-end and approach $1 trillion by 2030, as more investors adopt ETFs to build low-cost portfolios at the expense of the unlisted managed fund industry.

"It's a fact that most active managers underperform their benchmarks over the long term, according to data from S&P. Australians are wising up to this underperformance and shifting to lower-cost ETFs, which has boosted the ETF market," Zaika said

To keep pace with the "soaring demand," Global X has launched four new ETFs this year, bringing its Australian portfolio to 45 ETFs.

The firm, which is owned by Mirae Asset Financial Group, is also charging forward with plans for more launches in the second half of the year, targeting lower-cost core exposures that investors use as portfolio building blocks.

Financial Standard reported last week on a potential Global X Australia 300 ETF, flagged by an ASIC company registry filing earlier this month.

Global X senior product and investment strategist Marc Jocum confirmed the firm's plan to "do more in the core space," with the intention of being "relevant to more clients."

The firm noted that 75% of new ETF flows have gone into low-cost products, which it said underlines a clear investor preference for cost-effective strategies.

"Importantly, as more capital shifts from active managed funds to ETFs, total fees paid across the financial industry will likely decline, which is bad news for high-cost fund managers, but a win for investors. This trend underscores Australian investors' fee sensitivity and their increasing preference to use ETFs to build portfolios," Zaika said.