The Australian exchange-traded fund market reached AUD7.12bn in assets under management, a record high, according to BetaShares’ Australian ETF Review for March.
March represents the sixth month in a row where the Australian exchange traded fund industry has achieved record levels of assets, with new inflows for March being approximately AUD107m. Year to date new inflows of AUD353m represents the best first quarter performance domestically. This is consistent with international trends as the global exchange traded products industry set a new first quarter inflows record of AUD70.1bn.
The best exchange traded products on the ASX by performance for the month were commodities based, being natural gas and the crude oil ETF.
“While February saw large flows to international equities, March saw a swing back to domestic equities based products. This is reflective of global markets where equities accounted for 93 per cent of flows, with a bias towards developed over emerging markets,” says Alex Vynokur, managing director at BetaShares.
Despite the high first quarter inflows across exchange traded products being equities based products, the cash ETF was the most popular in terms of new inflows during March, indicating a desired investor balance between stability and growth.
“While investor sentiment and trading values continue to rise, there is still cautiousness around capital growth being exhibited by investors with 65 per cent of the inflows this month attributed to cash or yield based strategies,” says Vynokur.
One new ETF was launched this month bringing the total number of funds to 85.
“Despite a wave of launches resulting in 25 new exchange traded products last calendar year, 2013 has seen reduced activity. This can be attributed to a maturing sector with all the major asset classes now represented by exchange traded products. However, we predict greater new product activity in the second half of the year,” says Vynokur.