The ASX exchange-traded fund (ETF) sector is dominated by a handful of providers. The use and popularity of ETFs have exploded in recent years. But even so, most investors just stick with one of several providers. These providers are offering an increasingly wide range of products.
The American not-for-profit ETF provider Vanguard remains dominant, with the Vanguard Australian Shares Index ETF (ASX: VAS) remaining the ASX's most popular exchange-traded fund by quite a large margin. But BlackRock's iShares, State Street Global Advisor's SPDRs, VanEck, BetaShares and ETF Securities (ETFS) are also all big players on the ASX ETF market.
It's the latter that has made some big news today though.
ETFS is one of the smaller ETF providers on the ASX. Even so, many of its funds, such as the ETFS Physical Gold ETF (ASX: GOLD) and the ETFS Battery Tech and Lithium ETF (ASX: ACDC) are very popular. Many of ETFS' products, such as the ETFS Hydrogen ETF (ASX: HGEN) and the ETFS FANG+ ETF (ASX: FANG), are also the only ETFs on the ASX that cover their respective corners.
ETFS has got a brand new bag
So what's this big news? Well, ETFS has announced that it has been acquired and ownership of the business has changed hands. The first new owner is Korea's Mirae Asset Global Investments Co. According to the company's press release, Mirae is "one of Asia's leading independent financial companies based in Seoul, Korea".
The other new owner is the United States' Global X ETFs, which is in itself a subsidiary of Mirae.
Mirae reportedly already has significant market exposure across the US, Brazil, Canada, Europe, Hong Kong, India, Japan and Korea. But this acquisition marks its first foray into the Australian market. With ETFS' $4.7 billion in assets under management, Mirae has swelled its global total to US$85 billion.
Why is Mirae buying into the ASX?
Here's some of what Byungsung Lee, CEO of Mirae Asset Global Investments, had to say about this deal:
We are incredibly excited to enter the Australian market and to meaningfully expand our global ETF footprint through the acquisition of ETF Securities' inventive business… 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.
Graham Tuckwell, Founder and Chairman of ETF Securities, added the following:
For 20 years, ETF Securities has been a pioneer in the ETF industry. From the introduction of the world's first physical gold ETF in 2003 to maintaining the largest precious metals ETF platform in Australia today and expanding its offering to include a growing range of thematic and digital assets products, I'm exceedingly proud of what the team has been able to accomplish…
As true innovators in the ETF industry around the world, Mirae Asset and Global X are likeminded – undeniably sharing our Australian teams' visionary mindset and commitment to client service
So the ASX ETF sector has certainly just been shaken up. It will interesting to see if this change heralds any significant changes for ASX exchange-traded funds going forward.
