Stay knowledgeable with free updates
Simply signal as much as the Exchange traded funds myFT Digest — delivered on to your inbox.
Latest information on ETFs
Visit our ETF Hub to search out out extra and to discover our in-depth knowledge and comparability instruments
The Australian Securities Exchange has introduced that it’s set to wind down its managed fund settlement service, or mFund, by the top of May 2026 saying it was not more likely to be a “material offering” within the native funds market.
This is because of a “notable shift in investor interest regarding unlisted managed funds, which has coincided with a growing demand for exchange-traded funds”, in accordance with the ASX.
ASX launched mFund in 2014 to offer traders with a “new way to access unlisted managed funds”.
The service permits traders to “buy, hold and sell units in unlisted managed funds through a process similar to buying and selling shares”, in accordance with its web site.
However, because the service’s inception, the market surroundings and investor preferences for unlisted managed funds have shifted in favour of ETFs. The ASX reportedly started contemplating closing the service in June.

This article was beforehand revealed by Ignites Asia, a title owned by the FT Group.
In July, the inventory trade operator launched a session paper to collect suggestions from product issuers and trade associations in regards to the proposed transfer.
Some of the suggestions garnered from the session embrace the truth that self-directed and suggested traders had been “unlikely to adopt mFund at scale” to the identical extent that they undertake trade traded merchandise, in accordance with the ASX’s response paper.
There had been 222 managed fund merchandise with a market capitalisation of A$1.34bn (US$887mn) as of October, in accordance with the most recent funding merchandise report from the ASX. In comparability, the 308 domestically listed ETPs have a market capitalisation of A$145.83bn as of the identical interval.
The development of lively ETPs and the twin entry ETP construction have additionally elevated the variety of methods obtainable to traders, thereby lowering the aggressive benefit of mFund over the ETP construction, in accordance with stakeholder responses.
The new design and distribution obligations have additionally “impacted the willingness of issuers and brokers to offer a broad range of alternative investment strategies and asset classes to investors through mFund”.
“It remains unclear to ASX to what extent, if any, addressing existing mFund operational and connectivity issues would increase the long term attractiveness of a settlement service for unlisted managed funds,” in accordance with the response paper.
At current, mFund is out there for purposes and redemptions through brokers till additional discover. Investors will then have their mFund holdings transformed from being broker-sponsored to being held immediately with the fund supervisor after funds are withdrawn from the service.
Further plans for the winding down of this service might be shared earlier than closure, the ASX mentioned in its announcement.
“The market for ETFs has been, and continues to be, strong and the evolution of active ETFs in recent years has provided a new opportunity for fund managers to bring their open-ended active products to ASX,” it added.
Australia’s ETF trade loved “robust inflows” of A$1.8bn final month, however these web gross sales “were not enough to combat a decline in asset values” amid weakening international inventory markets, in accordance with Betashares.
Assets below administration in Australia’s ETF trade totalled A$150.1bn on the finish of final month, down from A$152.9bn on the finish of September and a document A$156.1bn on the finish of August.
Chris Brycki, founder and chief govt of Australian robo-advisory agency Stockspot, mentioned earlier this month that the nation’s ETF trade had expanded quickly up to now few years, however that Australia was “still a long way behind other ETF markets around the world”.
*Ignites Asia is a information service revealed by FT Specialist for professionals working within the asset administration trade. Trials and subscriptions can be found at ignitesasia.com.
https://www.ft.com/content/21c166a4-b488-48ce-ab94-e78448a68514