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Exchange traded funds hit record funds under management

Exchange traded funds hit record funds under management

Funds under management in Australia's exchange traded funds industry continue to grow.

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.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia. The commentary provided from external companies that are not a member of the Commonwealth Bank of Australia Group of Companies (the CBA Group), including but not limited to BetaShares, does not represent an endorsement, recommendation, guarantee or advice in regard to any matter. Neither Commonwealth Securities Limited nor members of the CBA Group accept any liability for losses or damage arising from any reliance on external companies and their products, services and material.