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Australian ETF market hits record AUD13 billion

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The Australian exchange-traded fund market reached a fresh record high in October as funds under management rose by AUD708m (5.5 per cent) to AUD13.4 billion.

The substantial month on month growth was driven by both new inflows (AUD300 million) and the strong bounce in equity markets in October.
 
In spite of the rise in equity markets, the highest inflows were into fixed income ETFs (AUD76m). Significantly, October was the first month in the industry’s history in which flows into fixed income exceeded other product categories.
 
Inflows to cash also remained strong with the BetaShares Australian High Interest Cash ETF receiving the highest inflows (AUD44m) of all ASX-traded ETFs in October.
 
“The growth in exchange traded funds is partly because investors increasingly understand that they provide convenient access to a range of asset classes, including Australian and international equities, fixed income, currencies, commodities and a number of outcome driven strategies such as the recently launched Australian Dividend Harvester managed fund,” says BetaShares managing director, Alex Vynokur. “Especially in times of increased volatility, investors are considering incorporating exchange traded funds as part of constructing more robust, diversified portfolios.”
 
In October, the best performing products were those that benefited from the sharp rebound in prices of agricultural (soft) commodities. BetaShares Agriculture ETF-Currency Hedged (synthetic), for instance, gained approximately 11 per cent.
 
Vynokur expects that the exchange traded fund market will continue on its strong growth trajectory in coming months, with the development of innovative new products to be a key driver in this new growth. Two new products were launched during October. At the end of the month, there were 95 exchange traded products on the ASX.

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