There are several large exchange-traded fund (ETF) providers that operate in Australia such as Vanguard and Blackrock. BetaShares, VanEck and ETF Securities are other examples. Another name that investors may soon get used to is Global X ETFs.
The underlying holdings of an ETF are ultimately what dictate the performance of an ETF, aside from fees. But, it can be important to know who the provider of the fund is, what fees they charge, the reputation of the provider and so on.
An acquisition in the ETF space
It was reported a few months ago by ETF Steam that Mirae Asset Global Investments and Global X ETFs have acquired ETF Securities Australia, which had close to $5 billion of assets under management (AUM). One of the funds that it offers is the ETF Securities GOLD ETF (ASX: GOLD).
The reported reason for the acquisition by Mirae and Global X ETFs was that it would allow them to add instant scale in the Australian market, including an extensive product lineup of thematic, commodities and digital asset strategies.
Lee Byungsung, CEO of Mirae Asset Global Investments, was quoted by ETF Stream, who said:
This acquisition underscores Mirae Asset’s continued commitment to maintaining industry-leading ETF businesses in key markets around the world and brings immediate scale to our operations in Australia.
Luis Berruga, CEO of Global X, said, according to ETF Stream:
ETF Securities and Global X share an exploration mindset that has allowed both businesses to quickly adjust to the demands of a very fast industry, and we are thrilled to leverage our global capabilities to support ETF Securities’ next phase of growth.
Our plan for Australia is to just continue to do the same. I think we can bring a lot to the table regarding our thematic and digital asset expertise. We do not have any plans to change anything and we trust the local management team.
In the short-term, our goal is to continue to hire talented individuals and launch products. We will start working together, but I want the business to preserve its independence.
What about the name?
One of the main things that investors may be keeping an eye on is the name. It wouldn’t be surprising if they did change the name some time. In June, Mr Berruga said to ETF Stream that a rebrand “could happen”.
Discussing a possible name change, he said:
It could happen, but you don’t want to acquire a business and right away do something to disrupt the growth trajectory of that business.
If, six months from now, we sit with the local management team and say, ‘Global X is one of the most trusted and admired ETF brands in the world, do we think it will be net positive for the business to unpack the brand?’, we will collectively make that decision.
Any new ETFs?
It may also make sense for Global X ETFs to launch a number of its successful US ETFs for the Australian market. Mr Berruga said that the Australian ETF market has “huge potential” and that there are “several opportunities that are not being offered in Australia” that Global X may want to bring to market over the coming months. It’ll be interesting to see the investment exposures that any new ETFs provide.
