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Australia Multi Asset

AustraliaBetaShares lists multi-asset ETFsBetaShares is listing a suite of multi-asset ETFs, in a bid to claim territory from Vanguard.

The four new ETFs are tailored to different risk appetites. The riskiest ETF – called “high growth”- will mostly hold shares. While the least risky ETF – called “conservative income” – will mostly hold bonds.

 

The ETFs will use other BetaShares-owned ETFs as a way of accessing shares and bonds.

  • BetaShares Diversified High Growth ETF (90% shares, 10% bonds)
  • BetaShares Diversified Growth ETF (70% shares, 30% bonds)
  • BetaShares Diversified Balanced ETF (50% shares, 50% bonds)
  • BetaShares Diversified Conservative Income ETF (25% shares, 75% bonds)

The funds will charge 0.26%, one basis point cheaper than Vanguard’s multi-asset ETFs.

Multi-asset ETFs are popular with direct investors and with some – usually smaller – financial advisors. They provide a one stop shop for building portfolios and give investors access to several index funds in a single trade.

They make it easy to run a “core and explore”, investing approach. This is where the “core” of an investors portfolio is in safe cheap index funds – such as today’s listings – while the “explore” part of the portfolio takes more risk or expresses investors’ preferences.

 

Analysis – commoditised, just like their underlying funds. And by the way, what happened to W200?
When I saw these listings, my first question was: what happened to the BetaShares Global Blue Chip Titans ETF (W200)? W200 was sort of listed on the ASX in August 2018. I say “sort of” because while the paperwork was all done and dusted, and while Bloomberg says the fund is pending, the fund – 15 months later – is yet to trade.


I ask because it would have made a lot of sense to stick W200 in these new ETFs. It would have allowed BetaShares to build multi-asset funds exclusively using house products, and rebate all the underlying ETF fees. But without W200, is potentially missing a jigsaw piece. 
The other thought, for me, is: what room is there to resist fee compression on this type of fund? If the Canadian experience is any guide, these types of plain vanilla multi-asset ETFs get commoditised very quickly – just like their underlying ETFs. On this score, BetaShares under-pricing of Vanguard is instructive.

 

Then again, Australia might be different.

 


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Bernie Thurston

Bernie Thurston is the founder and CEO of Ultumus, a leading provider of ETF and index data, calculation, and workflow solutions. With over 20 years of experience in financial technology, Bernie has been at the forefront of index and ETF innovation since 2003.

His finance career began at Markit, where as Managing Director for Equities he designed and developed products for index and ETF composition and dividend forecasting from 2003 to 2011. He then founded and led DeltaOne Solutions as Managing Director, building it into a global provider of index and ETF trading data and technology services. The company managed over 100,000 multi-asset class products before being acquired by Markit in 2015.

Following the acquisition, while working for an ETF issuer, Bernie identified fundamental issues in how index and ETF data was represented across the industry. This led him to found Ultumus in 2016, building solutions for ETF primary market operations. Under his leadership, Ultumus has grown into a market leader serving major financial institutions globally, with its ETF Order Management System (OMS) supporting create and redeem workflows worldwide and its PCF platform calculating and distributing portfolio composition files for ETF issuers across every major market.

Bernie sold Ultumus to SIX Group in 2021, where it continues to expand across Europe, North America, and Asia-Pacific. Known for building lasting teams and leveraging cutting-edge technology, Bernie is focused on establishing Ultumus as the backbone of the global index and ETF industry through standardisation and automation.

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