Chi-X to launch bespoke indices, ETFs

A red paper boat navigates through a group of grey ones.

Chi-X Australia will launch new indices to expand its product range.

Securities and derivatives exchange Chi-X Australia will broaden its product range with exchange-traded funds (ETF) and “smart” warrant products based off new tailored indices as it looks to bring competitive innovation to the industry.

“Australia likes to say that it’s a market leader in a lot of things, but I don’t think Australian financial markets are a leader in terms of innovation. If anything, we’ve been stagnant over the course of the last 15 to 20 years,” Chi-X Australia chief executive Vic Jokovic said at a media briefing in Sydney today.

“The global financial crisis did a proper job of getting retail investors, in particular, to move away from some of the more innovative products and so whenever there is new and innovative product out now, there’s a lot of concern and fear.

“We’ve got some work to do in terms of broadening the level of innovation and new products – for example, with SMSFs you could say the amount of product hasn’t kept pace with some of the overseas markets. So it has to be about new product and innovation, it can’t just be about price.”

The exchange soft-launched its CXA 200 Index in December last year.

Chi-X Australia head of products and sales Shane Miller revealed it was working with a partner on an index built specifically for retail investors, including SMSFs.

“As a general concept, we’re currently looking to do an index which is designed for retail investors,” Miller said.

“It’s still a few months away and on the back of that index hopefully there will be ETFs and other products associated with that as well.

“In addition to that, the other index we’re doing will have different products, perhaps in the warrants space, that will allow investors a different type of exposure.

“We’re also currently in discussions for further indices.”

Jokovic said Chi-X was in discussions with all key Australian ETF issuers about new products and expected to launch “smart” warrant products, avoiding run-of-the-mill warrant offerings.

There are 800 unique warrants quoted on Chi-X.

The exchange has grown its market share of the local securities market to a record monthly average of 24 per cent since its launch six years ago.

To date, it holds over 35 per cent market share in Australian listed ETFs.

Jokovic was appointed as chief executive in August last year.

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