Local challenger enters Australia's ETF market

ETF Shares, Australia's first new index ETF issuer in more than a decade and the country's only locally owned provider, is preparing to launch.

The firm is led by Cliff Man as chief executive, David Tuckwell as chief investment officer, and Arjun Shanker as chief risk officer. They previously held senior roles at Global X ETFs, with Man serving as second-in-command and head of portfolio management, Tuckwell heading the product, strategy, and research team, and Shanker holding a senior role supporting the management of Victoria, South Australia, Tasmania, and Western Australia.

They first worked together at ETF Securities and remained with the business after its acquisition by Mirae Asset Global Investments, the family office of Korean billionaire Hyeonjoo Park. They stayed through the rebranding period to ensure a smooth transition following the sale.

The trio launched ETF Shares after observing a greater proliferation of ETF issuers overseas and identifying a lack of choice for Australian consumers in the local market.

Man noted that Australia currently has six ETF issuers - BlackRock, Vanguard, State Street, BetaShares, Global X, and VanEck. By comparison, Canada has more than 20 and the UK has nearly 30.

He said Australia's ETF landscape is "highly concentrated," adding that having an industry dominated by a few players "something we see in other parts of the Australian economy."

"This highly concentrated market benefits no one but the incumbents - and we think our entry will shift that dynamic. Without giving away too much during the exposure period, we expect our presence in the market will lower fees and increase competition from day one," Man said.

The firm is targeting an early May listing, pending the completion of the exposure period.

He added that ETF Shares' entry will "increase competition and product innovation" from day one.

"We're going to be selective in our product launches. We only plan to launch funds when and where there is clear evidence of demand from Australian retail investors and advisers," he said.

"We believe that being locally owned and fully locally managed means we're better able to tailor our products and services to Australian advisers."