The Australian exchange traded funds (ETF) industry grew by nearly $600m in January, with total funds under management (FUM) reaching a record high of $36.6bn, according to the BetaShares Australian ETF Review – January 2018.
New inflows accounted for 75% (or $432m) of the FUM growth, with asset value appreciation accounting for the remaining 25% of the growth, aided by a strong performance in global markets, the report said.
Equities or bonds?
The largest flows by category were in international equities, with strong demand for global and asian equities.
Flows into Australian bonds were also strong in January, with investors continuing to allocate to this asset class given recent sharemarket volatility.
BetaShares managing director Alex Vynokur, said: “Although January is usually a quiet month among investors, the Australian ETF industry has still managed to reach a new record.
“January was an interesting month, too, because of the allocations seen beyond the broad global equity ETFs, which included increased investments in Asia and emerging markets."
Is a trend emerging?
Vynokur said he thinks the activity indicates an emerging trend.
“These flows show that Australian investors are developing specific views in the international markets and implementing those views through ETFs, which deliver a cost-effective and simple way to access diversified overseas exposures.”
The number of Exchange Traded Products trading on the ASX remained at 226, the report said.