Montgomery joins Australia’s small ETMF club

by , 4th December 2017

Sydney-based money manager Montgomery Investment Managers will join the small club of Aussie ETMF issuers with its first listing planned for the end of the year.

The new ETMF, the Montgomery Global Equities Fund Managed Fund (MOGL), which will list on 20 December, will be structured as an ASX-traded version of Montgomery’s unlisted global fund.  As an ETMF, MOGL will be priced intraday like an ETF but unlike an ETF will not make its holdings public.

MOGL will be a concentrated equity fund that will typically invest in an all-cap portfolio of 15 – 30 companies listed on major global stock exchanges. The active stock picking will be backed up by active currency management. It will come with a headline fee of 1.32% and a conditional 15% performance fee, which is only applied when net returns exceed the benchmark. MOGL’s benchmark is the MSCI World Net Total Return Index, which it tries to beat by 3%-5% p.a. over rolling 5 year periods.

The Australian ETMF market is very new and at this stage quite small. At the time of writing, there are only 8 ETMFs listed on the ASX. The appeal of ETMFs is that they allow fund managers direct access to Australia’s deep retail market, particularly its $700bn self-managed superannuation pot.

That ETMFs are publicly listed also gives them accessibility advantages over unlisted funds as they allow investors to buy in without getting stuck in the paperwork and bureaucracy that comes with trading off exchange.

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