Global X Chases Down Competitors After Stellar First Year Performance
After entering the Australian market just 18 months ago, Global X is chasing down its local competitors with the goal of moving up the ranks in assets under management (AUM) by the end of 2024.
Global X’s AUM hit $6 billion during 2023 and the internationally backed ETF provider is looking to continue its growth by reaching $10 billion by the end of 2025, expanding its market share.
Chief Executive, Evan Metcalf said Global X has ambitions to be a leader in delivering a better investment experience to Australians because of the quality and uniqueness of its products, insights, and engagements.
“2023 has been a foundational year for Global X, building our brand, team, and product lineup to best serve our clients. Heading into the new year, we are elevating our strategic approach to drive meaningful growth across the business and increase our share in the Australian ETF market which is currently sitting at 4%,” Metcalf said.
“Our current lineup is comprised of many unique and innovative solutions, many first to market. Next year we have plans to continue the expansion of our product range so, over time, it will be relevant to more clients. We are not in the business of pursuing price wars however we are committed to competing aggressively on price where necessary. And we will continue to focus on products that we know have upfront demand and are true to our investor-first philosophy.”
Global X has launched 12 funds since entering the Australian market in September 2022, including Australia’s only copper miners ETF (ASX: WIRE), a trio of covered call products (ASX: AYLD, QYLD and UYLD) and a competitor product to one of the most popular US-listed, tech-heavy index ETFs at half the management fee (ASX: N100)
Senior Product and Investment Strategist, David Tuckwell said the Australian ETF market is becoming increasingly sophisticated and saturated.
“As more competition enters the market, we cannot take our leadership in niche market segments, such as commodities, digital assets and thematics for granted. We will continue to defend our position in this space while diversifying into new areas,” Tuckwell said.
“Producing year to date total returns of more than 55% and 86% respectively, the Global X Semiconductor ETF (ASX: SEMI) and Global X FANG+ ETF (ASX: FANG) – the only funds of their kind in Australia – have been two of the top performing ETFs in 2023. With exposure to the artificial intelligence (AI) megatrend, we believe funds like SEMI and FANG will continue to perform as AI becomes a mainstay across industries and the globe.”
“Similarly, our direct exposure cryptocurrency ETFs outperformed this year as the US Securities and Exchange Commission weighed up whether to approved spot Bitcoin ETFs. Now this decision has been pushed to early 2024, we expect Bitcoin and Ethereum prices to climb higher in the interim. In fact, Bitcoin tipped over $40,000 last week, which is reflected in the Global X 21Shares Bitcoin ETF that has soared more than 140% this year to date.
“My call for 2024 is we’re entering a period of structurally higher gold prices. Gold prices touched record highs this year despite facing a number of headwinds, all of which should dissipate in the new year. Real yields are falling as markets bring forward rate cut expectations, the US dollar is weakening, speculators are returning to futures markets, plus gold ETF outflows have stablised. The dice are loaded in favour of 2024 being a record setter for gold prices,” Tuckwell said.
“Alongside gold, US treasuries will also be in vogue next year thanks to real yields sitting in their highest 90th percentile over the past 20 years at many points in the curve. And indeed, with the rising debt pile in the US, and inflation trending down, some investors are surely wondering how long yields can stay at these levels for. In my opinion, get them while they’re hot.
“On the other side of the world, Global X is honing in on India as a compelling growth opportunity. Strong economic, demographic and political drivers have facilitated notable growth year-to-date, with the country’s third quarter GDP jumping to 7.6% – well over the 6.5% which was projected by Reserve Bank of India and international analysts. India’s outperformance is set to continue in the coming years and can be capture by investing in the Global X India Nifty 50 ETF (ASX: NDIA) which tracks the fifty largest companies listed on the National Stock Exchange of India. NDIA was launched as the first fund of its kind in Australia in 2019.”
