Avantis backs Aussie equities for next ETF

Avantis Investors is set to introduce an Australian equities exchange-traded fund after strong interest from local advisers.

The U.S.-based firm entered the Australian market last year with three active ETFs: the Avantis Small Cap Value Active ETF (AVSV), Avantis Global Equity Active ETF (AVNG), and Avantis Emerging Markets Equity Active ETF (AVTE). These funds initially launched on Cboe before moving to the ASX in April.

Chief investment officer Eduardo Repetto said the products have been well received. “We will probably launch more ETFs in Australia, such as Australian equities, that’s a big ‘yes’ from us and is something that advisers have been asking for. We can manage it from Australia to meet adviser needs,” he said. “We have to make sure we are giving people what they want so Australian equities are part of the plan.”

Although the firm is based in the US, it has opened an office in Sydney so said an Australian equities vehicle could be managed locally.

Platform listings took longer than expected

Its existing ETFs have also been listed on six platforms now such as North, MLC Expand and BT Panorama, which Repetto said was a “time-consuming process” compared to other jurisdictions.

“Australia takes a lot of time to do due diligence, it was quite slow to get on platforms. When you launch in the US, many platforms such as Schwab and Pershing, you automatically go on the platforms like a stock would. But in places like Australia, it can take longer as they want to see a certain AUM or a certain track record,” Repetto said.

“But Australia does a good job as everyone is exposed to investments via their superannuation, there is a lot of savvy investors and they have access to a lot of different managers.”

With the firm reaching US$160 billion in assets under management some six years after launch, Repetto said it is not looking to move away from its American Century Investments backing which has been in place since 2019.

“We are very happy with the current arrangement, you need investment management and distribution and marketing but you also need a huge operational infrastructure underneath that of IT, of HR etc and American Century can provide us with that, they’ve been a great support.”