Thursday 6th June 2019
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NZX's Smartshares and global asset manager BlackRock rang the bell at the New Zealand stock exchange to launch eight new exchange-traded funds, including two thematic funds that target automation and robotics and healthcare technology.
Of the other six funds, five provide international equity exposure to US, European, Japanese, emerging markets and global markets that screen out environmentally and socially harmful activities such as nuclear weapons, thermal coal, tobacco and oil sands. The last one is a global aggregate bond ETF tracking a benchmark index containing more than 24,000 different bonds globally.
"All of a sudden now we are starting to get real in giving New Zealand investors simple, efficient ability to get exposure to global elements," said NZX chief executive Mark Peterson.
NZX sees ETFs as one of several strings to reinvigorate growth in the capital market, linking the vehicles to a broader suite of products and new distribution channels to attract different investors to the public market.
"It's what the NZX stands for, which is trying to create the platforms for those exposures to be able to be accessed," Peterson said.
Smartshares chief executive, Hugh Stevens, said the two thematic funds were chosen because they thought they would be the most appealing to New Zealand investors.
"Our feeling was that we wanted to focus on two that would really capture the imagination of New Zealand investors and I think in New Zealand we are a very high tech early adopter nation," he told BusinessDesk.
The automation and robotics ETF will give investors exposure to artificial intelligence and e-commerce logistics while the healthcare ETF will tap into areas such as personalised medicine and immunotherapy.
There were a smattering of trades in the funds shortly after the bell was rung and Stevens expects trading to ramp up, given the strong pre-registration interest over the past week or so.
"It's a growing market and what we have seen from the expressions of interest is that there is a core group of early adopters and then we will just see steady growth," he said.
"Later in the day, we'll see the trades coming in from the nominees and over the next few days people will get stocks and tickers set up in their trading system," he added. Sharesies, for example, added the eight new funds to its platform.
NZX-owned Smartshares partnered with BlackRock to offer the funds.
Christian Obrist, BlackRock's head of iShares Australia, said New Zealand is a "very progressive" market for ETFs and "it's all about bringing more choice to the investors base."
He said launching the funds locally would have been a major effort, "so it makes more sense for us to partner and collaborate with Smartshares to bring our product to the market." iShares has around US$1.9 trillion in assets under management.
Smartshares is New Zealand’s only issuer of ETFs listed on the NZX Main Board and across six registered schemes manages over $3.2 billion. It launched New Zealand's first ETF in 1996.
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