A revolution has taken place in share investing since the turn of the century. American firms have led the charge with the likes of Vanguard and Blackrock taking passive investing around the globe.
Disenchantment with active fund managers has seen funds flow into the passive sector, accelerated by the emergence of exchange traded funds, or simply ETF’s.
In Australia, the revolution arrived late. Active managers held sway for many years before eventually the dam wall broke. The American behemoths came hard, but they didn’t have it their own way.
Aussie startup Betashares grew out of the GFC and took up the fight. Cobbled together by Alex Vynokur, an immigrant from the former Soviet Union, it wasn’t long before Betashares captured the attention of market participants around the country.
15 years on and Betashares has more than 90 ETF’s, $37 billion assets under management and 150 employees. It is the second largest ETF provider in the Aussie market and in 2023 managed to rank number one for inflows with 37 per cent market share.
As a 16-year-old Vynokur and his family left the Ukraine as the walls of the former Soviet Union came crumbling down. Alex had no English and had to start from scratch. He caught on quickly and in a few short years was studying Law at UNSW.
A brief stint working as a lawyer was followed by a job at finance house Pengana with Malcolm Turnbull and Russell Pillemer. He deduced that not all active managers were able to beat the market. Around the same time, he latched onto the emergence of ETFs. Mortgaging his house and taking time for a fact-finding tour of the US saw him kick off Betashares.
In this episode of Success and More Interesting Stuff, Alex discusses his view on the future of both passive and active investment styles, the incredible growth of Betashares and his passion for making an impact on war-stricken Ukraine.