Retirement
Super sector has had ‘huge vested interest’ in slowing ETF growth: ETF Securities
Retirement
Super sector has had ‘huge vested interest’ in slowing ETF growth: ETF Securities
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.
Join the nestegg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
Join The Nest Egg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
Super clean-up saving members millions
Superannuation must choose between ‘patriotism and profits
Government wants more super fund mergers
Why am I paying a fee for no service?
Government slammed for ‘tax grabbing’ low-income super proposal
Aussies still missing out on $20 billion in super
most viewed
Property
Tax evasion puts TV presenter turned property flipper behind bars
Superannuation
Why am I paying a fee for no service?
Estate planning
Housing inequality could ignite the death tax debate
Stock market
Are you an AMP shareholder and don’t even know it?
Listen to
What the heck is with robots and tech - ETFs explained
More podcasts
Find super’s sweet spot
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.