Mirae Asset Global Investments Co., the parent company of ETF issuer Global X, has announced the acquisition of ETF Securities Australia, combining two leading issuers of thematic exchange-traded funds, and providing a strong foothold in Australia’s fast-growing ETF industry.
The deal completes the buyout of ETF Securities, which previously sold its U.S. business to Aberdeen Standard Investments and its European business to WisdomTree in 2018.
Graham Tuckwell, founder and chairman of ETF Securities, noted in a release that Mirae and Global X had the abilities to take the Australia business to the next level of growth.
“For 20 years, ETF Securities has been a pioneer in the ETF industry,” said Tuckwell, who is also chairman of ETFS Capital, the parent company of ETF.com. “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.”
The company’s top funds by assets under management include the ETFS Physical Gold (GOLD), the ETS Battery Tech & Lithium ETF (ACDC) and the ETFS Morningstar Global Technology ETF (TECH). The issuer has products targeting everything from palladium to bitcoin to India with combined assets under management of $3.3 billion.
Third Largest ETF Market In The World
Mirae has $640 billion in assets under management worldwide, including $80 billion in ETFs. That includes 90 ETFs with $40 billion under subsidiary Global X, which the firm acquired in 2018.
Global X is the twelfth-largest issuer of U.S. ETFs, with a strong focus on thematic funds. Its top funds include the Nasdaq 100 Covered Call ETF (QYLD), with $6.8 billion in assets; the Lithium & Battery ETF (LIT), with $4.6 billion in assets; and the U.S. Infrastructure Development ETF (PAVE), with $4.1 billion in assets.
Global X entered the European ETF market organically in 2020, but with increased financial resources from the rapid growth in its ETFs, the firm was able to get a head start in Australia with its acquisition, said Luis Berruga, CEO of Global X ETFs.
“We need to be in Australia because it's the third largest ETF market in the world, right behind the U.S. and Europe,” he said.
Speaking to ETF.com, Berruga said ETF Securities was a fit, both from a product standpoint and a cultural standpoint.
“From a cultural standpoint … you could clearly see the entrepreneurial mindset of Graham, as well as the local management team.”
Australia also has an enormous runway for growth, Berruga said. “Australia is a very attractive market, because not only is it already the third largest ETF market in the world, but [it’s] growing at a very fast pace. If you look at AUM growth in 2021, it was around 30%. We're still in the very early stages of seeing more ETF adoption in Australia.”
Australia is still going through the transition from the more traditional investments in mutual funds to ETFs, a trend that has a long way to go.
“We have more and more conversations with both financial advisors and retail clients. They are learning more about the benefits of ETFs around tax efficiency, low costs, transparency and liquidity,” he noted. Even prior to the acquisition, client inquiries were coming in from Australia wanting to know more about our ETFs and Global X, he said.
“The retail market in Australia is at an inflection point,” Berruga said. “As we have seen in other markets, like the U.S., these days, it is a lot easier to open accounts online with fintech companies or robo advisors, and start trading ETFs in a matter of minutes.”
His company never had a physical presence in Australia before the acquisition, but Berruga said investors in Australia are buying U.S.-listed ETFs, according to recent data.
“Having the opportunity to take over an established, fully operational business that has a phenomenal product lineup and a strong local management team will allow us to start launching more and more products in the Australian market, and that should make it much easier for local investors to invest in our strategies,” Berruga explained.
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