subscribe to our newsletter sign up

Super sector has had ‘huge vested interest’ in slowing ETF growth: ETF Securities

slowing ETF growth, ETF Securities, interest, Aussie retirement

Aussie savers have lost “hundreds of billions” due to super fund money flowing into managed funds, but the maturing ETF sector provides a light at the end of the tunnel, ETF Securities’ founder has said.

Speaking at a media briefing in Sydney on Wednesday, ETF Securities founder Graham Tuckwell said that while Paul Keating did a “fantastic thing” in introducing compulsory superannuation, the safety blanket for Aussie retirement came with a side effect.

“He did a wonderful thing by forcing the money to go in [to super] but unfortunately at the time, they didn't provide a very low-cost way of just getting exposure to the overall equity market,” he said.

“Had that been the case, Australians would have saved hundreds of billions of dollars in fees.”


Given the large amount of money in super and a tradition of running the money through managed funds, Mr Tuckwell argued there’s been a “huge vested interested” in slowing the growth of the ETF sector in Australia.

“Because what are ETFs in a nutshell? They're simply a lower cost way of people getting a spread of investments, generally equity investments but it could be bonds, but that's it in a nutshell.”

However, he said understanding of ETFs is increasing, “thank goodness”.

As it stands, the Australian ETF market is around seven years behind Europe, which was another seven years behind the US, Mr Tuckwell argued.

“The mindset has changed in the last two or three years. It is really going to take off from here. The next five years will see enormous growth,” he said.

Continuing, Mr Tuckwell dismissed as “absolute nonsense” arguments that ETFs were “Armageddon” in terms of volatility.

Earlier this year, the World Economic Forum said ETFs are “yet to be tested in crisis conditions” and could potentially “exacerbate” any major market correction.

To Mr Tuckwell, suggestions that ETFs are “financial weapons of mass destruction”, is overblown.

“All that is happening is people are taking their money away from active fund managers who are charging them a high fee and putting it into a lower-fee product,” he said.

Super sector has had ‘huge vested interest’ in slowing ETF growth: ETF Securities
slowing ETF growth, ETF Securities, interest, Aussie retirement
nestegg logo
subscribe to our newsletter sign up
Recommended by Spike Native Network
Blair Campbell - HHG - I had a brief discussion with someone on Facebook recently.
They insisted that payment of income tax by individuals was 'voluntary'.
I told him that.......
Paul Cunningham - You mean "as the Sydney and Melbourne property markets charge towards their longest price correction" ....
Anonymous - Where does Core Logic get its information? In the early 1990's there was a 2-3 year price correction of up to 50% in Melbourne and Sydney in the.......
Adviser with a brain - Why does Australian Super pretend to be this All for the members fund yet if you want to buy direct shares you charge members an extra $400 odd a year.......