A fintech startup developed through the Macquarie University Incubator program is hoping to carve out a slice of Australia’s Exchange Traded Fund (ETF) market offering lower fees and access to US markets.
ETF Shares is the first new player in the local ETF market in more than a decade, launching this month after just six months of development.
Graham Tuckwell’s London-based VC ETFS Capital has backed the fintech, cofounded by his son, David Tuckwell, who is CIO; and Cliff Man, the CEO, and former 2IC of ETFs at Global X.
They’ve also added Arjun Shanker, formerly of Citigroup, NAB and Global X ETFs, as chief revenue officer.
Tuckwell senior, the board chair, is no stranger to ETFs, having sold his business, ETF Securities Australia, to Korea’s Mirae Asset Global Investments in late 2022, and rebranded as Global X.
He’s also well known to ANU students having donated more than $100 million to the Canberra uni for the Tuckwell Scholarship Program.
ETF Shares offers both wholesale and retail funds management across three US shares–focused ETFs, with a 0.29% management fee.
BEST ETFS US Quality ETF covers 100 large US companies, the WWW ETFS US Technology ETF offers exposure to the largest and most liquid US tech companies, and the HUGE ETFS Magnificent 7+ ETF features the 10 largest NASDAQ-listed companies.
David Tuckwell said Australia has one of the most concentrated ETF industries in the world.
“Until now, there have only been five actively driven ETF issuers—all foreign-owned subsidiaries—compared to around 100 in the US, 20 in Canada and 30 in the UK,” he said.
“We’re not replicating what’s already out there—our products bring genuinely new and innovative strategies to market, offering investors and their advisers more choice and better returns at a lower price point.”
His cofounder, Cliff Man, said the ETF sector has seen annual growth of around 30%.
“While local fund managers have been quick to launch active ETFs, these tend to carry higher fees and have a track record of underperformance,” he said.
“Most asset growth and long-term wealth strategies now sit on the index side of the market, which has seen very little competition. That benefits the incumbents, not investors. We’re here to shift that dynamic.”
Tuckwell argues that ETFs offer investors greater transparency.
“ETFs have played a key role in cleaning up the industry because they don’t pay commissions on the profits and interest they generate,” Tuckwell says.
“Combined with lower fees, this means more money in consumers’ pockets.”
The launch of ETF Shares is also the first time an index ETF provider has chosen Cboe Australia, the ASX alternative, as its exclusive listing venue
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