Aussie ETF firm BetaShares reports that while ETFs continued to attract net inflows in March, weaker Australian and global equity markets pushed overall funds under management below February’s peak.
The report reveals that March saw the continuation of positive net inflows into the industry with AUD481 million of net flows. However, declining equity markets performance pushed total industry FUM 0.8 per cent lower (-AUD288 million) – ending a 13-month run of positive growth.
As with the previous two months of 2018, International Equities continued to be the largest category for inflows, which accounted for just under AUD200 million, followed by Australian Equities, attracting AUD180 million in net inflows.
Commenting on the dip, BetaShares’ Chief Executive, Alex Vynokur, says: “We have seen a solid 13 months of uninterrupted growth in the industry, but coming into the second month of the year, global equity markets fell significantly, and despite the continued positive flows, the industry slowed in line with the fall in markets. Notably, this was not caused by a lack of net buying by investors but rather market forces.”
However, the market declines allowed products providing short exposure to perform strongly, with BetaShares Australian Equities Strong Bear Hedge Fund (BBOZ) and BetaShares US Equities Strong Bear Hedge Fund (BBUS), the top two performers for March.
“Similar to last month, we saw many investors using exchange traded products to not only take long positions during the global share-market sell-off, but also to hedge portfolios using short products,” says Vynokur.
“The benefit of exchange traded products which allow people to profit from, or protect against market declines, has been vividly illustrated over the last two months, with trading continuing to be strong in this category.”