SelfWealth to launch ETF targeting SMSFs

Online broker SelfWealth has announced it has secured $100 million in seed funding from Graham Tuckwell’s ETFS Capital to launch a new exchange-traded fund (ETF), the SMSF Leaders ETF.

The SelfWealth SMSF Leaders ETF is expected to list on the Australian Securities Exchange (ASX) in the first quarter of 2019.

The product’s portfolio is based on crowdsourced data collected from more than 50,000 SMSFs. The data is used to identify a pool of top-performing stocks, which are then filtered for inclusion in the ETF.

The fund has been shown to have outperformed the ASX 200 Index in the testing phase, SelfWealth said.

SelfWealth has signed a product development agreement with ETFS Capital and ETF Securities Australia. The SMSF Leaders ETF tracks an International Organization of Securities Commissions-compliant index developed by the firms based on SelfWealth’s WealthCheck score.

ETF Securities Australia will be the responsible entity for the offering and the project will be backed by the parent company, ETF Capital,  formerly known as ETF Securities.

SelfWealth managing director Andrew Ward said the launch of the ETF will establish another source of SelfWealth’s annuity revenue streams.

“Within the first year of its launch, the ETF could potentially comprise 20 per cent of our total revenue,” Ward said.

SelfWealth also announced the completion of a share placement of fully paid ordinary shares to raise around $1.44 million. Current shareholders will be offered participation at the same pricing under a rights issue to raise an additional $1.5 million.

The funds raised from the placement and the rights issue offer will be invested to support the marketing of the SMSF Leaders ETF, technology and other ventures within SelfWealth.

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