(Bloomberg) — Dimensional Fund Advisors is launching three actively managed exchange-traded funds on Australia’s main stock market to tap increasing demand from financial advisers, according to the company.
The ETFs provide access to strategies currently available as mutual funds and include global value equity, Australian value equity and global small-cap offerings. The funds complement three separate local and international stock ETFs from Dimensional already listed on the bourse operated by ASX Ltd.
The decision to launch the funds was partly driven by appetite from financial advisers, who are increasingly looking to ETFs to build client portfolios, said Bhanu Singh, Dimensional Australia’s chief executive officer.
The new funds “allow financial professionals to tailor asset allocations to meet a range of client needs,” Singh said. Actively managed ETFs can offer “the benefits of indexing — such as low costs, low turnover and high diversification — paired with the advantages of flexible implementation,” he said.
Read: BlackRock Says Active ETFs Poised to Hit $4 Trillion by 2030
Dimensional has $730 billion under management, with more than $50 billion from clients in Australia and New Zealand.
ETF Growth in Australia
Assets in ETFs listed on the ASX have ballooned in the past 10 years from A$12.4 billion ($8.2 billion) in July 2014 to A$208.7 billion last month, data from the exchange shows.
“The growth in the Australian ETF market over the last decade has been extraordinary,” said Andrew Campion, general manager of investment products at ASX. He pointed to the rise of passive investing and the ability of ETFs to “access fast-growing markets like US-listed tech stocks” as key drivers of demand.
Dimensional ranked as the eighth-largest ETF issuer in Australia with $3.1 billion at the end of June, according to a report from Bloomberg Intelligence, lagging Vanguard Group, local fund manager BetaShares Holdings Pty, and BlackRock Inc.
The listing of more active ETFs should continue to spur fund flows in Australia, according Bloomberg Intelligence ETF analysts Rebecca Sin and Eric Balchunas.
The launch of the three Dimensional funds that offer access to strategies available in mutual class form “could be followed by more, as investors seek similar dual-class listings,” they wrote in a report. “Investor interest for actively managed funds could persist as more become available.”
(Updates with BI note starting in the penultimate paragraph)
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