The Australian exchange traded fund market surpassed AUD14 billion in funds under management in November, driven by strong new money flows and growth in global equity markets.
60% of industry growth over the month came from new inflows, which totalled around AUD600 million. Product development activity also helped to stimulate growth, as three new funds were launched on the ASX, including the BetaShares Australian Dividend Harvester Fund (managed fund) (ASX: HVST).
US equities was the most popular product category in November, with over AUD200 million in inflows, as investors were encouraged by the positive performance of the US market. In addition, US equities ETFs made up two of the top five performing products of the month.
“US equities exchange traded funds experienced strong inflows following the continuing rebound in those markets, as investors continue to make use of ETFs as a cost effective and convenient way to access the US market,” says BetaShares Managing Director Alex Vynokur. “International equities have generated a significant amount of interest as a product category this year, with four international funds launching on the ASX in the last three months alone.”
Inflows also continued to be strong in the cash category, with BetaShares Australian High Interest Cash ETF (ASX: AAA) receiving around AUD25 million in new money inflows. Vynokur says that the statistics for the month indicated investors were using ETFs actively across a range of asset classes to protect and diversify their portfolios.
“The local market is continuing to mature in terms of both the range of asset classes offered, and the ways in which investors are approaching ETFs as an investment tool,” says Vynokur. “The ability to choose between a multitude of exposures including equities, cash, commodities and fixed income allows investors to use ETFs to achieve specific investment goals and construct more robust investment portfolios.”