Despite The Infestation Of Gimmicks, Australia’s ETF Market Is Undergoing Rapid Maturation, According To A Recent Study

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A recent study by Cerulli Associates revealed that Australia’s ETF market is expanding and diversifying, with a wide array of ETFs available.

This surge in supply may mean consolidation of assets into existing products should become the priority over introducing new ones.

Even in testing times, the global research group Cerulli Edge has reported that as of September’s end, there were 304 ETFs listed in Australia, with more products continually being released. Their most recent Asian Monthly Product Trends report highlights this remarkable feat accomplished despite volatile market conditions.

Cerulli said, “the diversity of the market has proven useful in difficult markets because it is now sufficiently sophisticated to offer much more than purely long-only options“.

The research group asserted that leveraged short funds, unheard of at the beginning of the sector, were among the highest-performing products in September.

During other months, specific specialty commodity ETFs made a strong showing. For instance, in August, there was a notable global uranium ETF. According to Cerulli’s insight, the impetus for Australia’s ETF industry is promising – despite some questions about whether new product launches are becoming too specialised or gimmicky.

“The jury is still out on whether the raft of recently launched products is gimmicks or genuinely useful. It’s hard to argue that having a wide range of options can’t be a good thing, however,” said Cerulli researcher Aaron Smoak.

The latest report outlines that while niche ETFs have been launching enthusiastically, they may need to meet the same investor demand level. This is best evidenced by some cryptocurrency ETFs that were eagerly launched in May but shortly delisted due to a lack of interest.

At the beginning of November, Cosmos Asset Management decided to delist its three cryptocurrency ETFs. Additionally, two funds that invested in units of Toronto-listed 3iQ CoinShares Bitcoin and 3iQ Ether ETFs also ceased trading during this same period.

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