BetaShares is a provider of ASX-listed exchange-traded funds (ETFs) and now the financial institution is expanding into superannuation with the acquisition of Bendigo Superannuation.
BetaShares provides some of the ASX's largest and most well-known ETFs, including BetaShares Nasdaq 100 ETF (ASX: NDQ) and BetaShares Australia 200 ETF (ASX: A200).
Now BetaShares wants a piece of the $3.9 trillion Australian superannuation sector. It was founded in 2009, has more than 1 million Australian investors and advisors as clients, and currently manages over $40 billion of assets across various ASX ETFs.
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BetaShares acquires Bendigo Superannuation
The acquisition is part of BetaShares' long-term strategy to build a "leading, independent financial services business" that offers a wide range of financial products to help clients reach their financial goals.
BetaShares wants to provide a wider range of products and services to help more Australians progress through all stages of wealth creation.
The ASX ETF provider won't be instantly offering superannuation products. Its immediate focus is to ensure a "smooth continuation of service" for existing Bendigo Superannuation members.
Over time, there are plans for a "greater range of investment options, improved member engagement, and enhanced education."
BetaShares said the changes and improvements will include transparency and greater flexibility, tailored educational tools and resources from BetaShares superannuation specialists, and an online experience that makes it easier to utilise superannuation.
This move follows the decision by Vanguard to launch Vanguard Super in 2022. When it launched, Vanguard claimed its Vanguard Super default option's annual fee was the lowest for members with balances under $50,000, and the lowest for members aged 47 and under.
Vanguard says that as its superannuation option grows, it's committed to passing on the benefits of scale to members through lower costs and an improving member experience. It will be interesting to see what BetaShares does regarding fees.
How large could the Australian superannuation system become?
According to Challenger Ltd (ASX: CGF) and the Australian Prudential Regulation Authority (APRA), Australia's superannuation system is forecast to grow from $3.9 trillion today to over $11 trillion in the next 20 years, making it one of the world's fastest-growing pension markets.
A number of elements are helping the growth of Australian superannuation assets, including government-mandated and rising contributions, tax incentives to encourage retirement savings and relatively low costs. BetaShares and Vanguard's focus on providing low-cost ASX ETFs and superannuation can help Aussie wealth grow further.
Australia's compulsory superannuation system started in 1992 and is one of the largest pension systems globally. In the past twenty years, it has grown by an average of 10% per annum.
BetaShares is tapping into a strong growth tailwind, and this can allow the ASX ETF provider to continue to grow its funds under management (FUM).
