00:00Now part of the reason you're here is last month you launched two actively
00:04managed ETFs in Australia. Can you tell us is this just the start? Is there more
00:09coming? Yes, so this is a theme that we're pursuing globally which is that
00:14we're expanding our products in line with investor preferences and but
00:20also extending our investment capabilities and so we're doing that
00:24through partnerships and the one that you refer to here in Australia are two
00:28ETFs that we launched, two active ETFs we launched in combination with Blackstone
00:33leading provider in the credit space and so it's an opportunity for us to bring
00:37that exposure to Australian investors and yes it's been a wonderful launch and we
00:44do intend to do more along those lines either launching our own ETFs or in line
00:49with other partners that we have. And where do you see the bulk of the demand
00:52coming from because of course the pension funds in Australia are huge but do you
00:55get interest from retail investors as well? Well what's interesting is ETFs in
01:01terms of products are increasingly becoming the product of the product
01:05structure of choice for all investors and for all productive capital from
01:09institutional investors. Intermediaries have always used ETFs but actually
01:13increasingly retail investors are also see the benefit of ETF investing which is
01:18that you have transparency, you have liquidity and you have access to a wider and
01:23wider variety of investment exposures. It's 25 years I believe since ETFs first launched in
01:30Australia. How have you seen the market evolve since then? Where do you see it
01:34heading next? So 25 years yes since the launch we celebrated that yesterday
01:39morning in ASX and actually because we were the first manager to launch ETFs into
01:44this market and in line with what we see in the rest of the world and we launched the
01:49first ETF over 30 years ago in the US so we have we have a very strong interest in
01:54this space. But as you say Paul it's increasingly we're seeing more prevalence
02:00of ETFs for uses of ETFs and actually our expectation is that here in APAC ETF growth
02:07is going to be tenfold over the next 10 years and will reach about 15 billion in
02:12assets under management and that's equivalent to what's going to happen in
02:17Australia as well. So increasingly people are seeing ETFs as the way to gain exposure
02:22to investment in diversified markets. Well you're here in the region obviously to
02:26leverage that growth you're heading to Hong Kong next as well so more broadly what
02:30are the expansion plans for State Street in Asia? Asia's APAC in Asia is really
02:36interesting because it's a very diverse region and you have different
02:40requirements from investors from regulators and investor preferences in each
02:45region and yet there are some similarities as well. So our intention and outside
02:51of our own intention the growth expectations for APAC are very strong
02:55and expected to be greater than anywhere else in the world. So we've been here in
02:59one area or other of Asia for over 40 years and so we already know the
03:06individual idiosyncrasies of the regions in APAC and we want to leverage off that.
03:12And those trends are we've been very large institutional investors for a very long
03:16time. We're the largest institutional investor in Australia, we're the largest
03:20pension investor in Japan but what we're seeing which is what we're seeing in other
03:24parts of the world increased democratization of investing so that move
03:29where more retail investing and then we've seen in the past. Some of that is
03:34actually culturally here in Australia there's a strong investment culture but in
03:38Japan less so when we see government backed policies to try and enhance that.
03:42You mentioned regulators there. How do you have to tailor your approach from
03:47country to country because Japan today we have a story they want to crack down on
03:50single stock leveraged ETFs. Korea had some well publicized issues with
03:55volatility around these earlier in the year. How do you tailor your approach for
04:00different jurisdictions? The way that we describe ourselves is that we are a global
04:05company so we're set up for global growth but local relevance is what's
04:09important to us and one aspect of that is different regulations in different
04:14parts of the world. You do again see similar themes emerging from regulators but
04:20also there are differences and we're set up to accommodate that. Again we've
04:25been doing this for a very long time. I know it from an EMEA point of view and it's
04:29the same in APAC and to understand what the regulators are trying to achieve and
04:34then we will build our products around that. Now you also oversee the Middle East
04:38as part of your role. How would you describe sentiment there at the moment in
04:43the light of the ongoing and seemingly intractable conflict between the US and
04:48Iran? Again we've been in the Middle East for over 25-30 years and so we know our
04:54clients there very well. This period has been unsettling for them and our staff
04:59that are based there and but it's still a region that's very important to us and
05:03our growth and I will be spending time there in the next couple of months. We
05:08need to talk about AI as well just finally. I mean it's disrupting pretty
05:10much everything it touches. Is it disrupting your business as well and how are
05:14you finding ways to work it in? Yeah there is both a disruptive and a
05:19productivity aspect to AI and so I have to think about from those two aspects and
05:25for us when we think about AI it's our business is managing money so how can we
05:30use AI to help us manage money better and then how do we interact with our
05:35clients more effectively and how do we run our business so it's those three
05:39strands we'll think about it and there's there's definitely going to be a
05:45lot to see in this space over the next few years. I also think we are highly
05:49regulated industry, a highly regulated organization, our clients place their
05:54trust in us so we do have to make sure that whatever we do in AI is within a
05:58very well managed risk framework system for longevity.
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