Defensive ETFs flourish through volatile January
Defensive exchange traded funds (ETFs) are minimising the impact of market volatility, as investors look for alternative opportunities, robo-advice provider, Stockspot believes.
In its February ETF update, Stockspot reported that January 2016 saw volatility and share market falls across the globe which led to the first negative month of ETF funds under management (FUM) growth since August 2015 (falling four per cent), while the commodities sector had the highest monthly increase in FUM largely due to a 10 per cent rise in the gold price.
"Inflows into the fixed income and cash sector also highlights risk aversion during January," the report said.
"BetaShares' Australian High Interest Cash ETF (AAA) added $50M of new FUM.
"Other Australian bond ETFs, including IAF, RSM and VAF also received over $10M of new FUM each during January."
While there were declines in FUM at the very top end of the ETF market, ETF Securities, saw a 10 per cent surge in FUM, despite the market volatility, UBS suffered the biggest percentage hit to its FUM, dropping 26 per cent
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
