ETFs buck redemptions trend
The exchange-traded fund (ETF) sector grew by $25 million in September, reversing a month of net redemptions in August, according to the BetaShares Australian ETF Review for the month ending 5 October.
The ETF industry saw outstanding units grow by 1.5 per cent in September, equating to $25 million in "new money", according to BetaShares.
However, the market capitalisation of the ETF sector declined by $272.6 million (or 5 per cent) in the last month due to a downturn in local and global stockmarkets. The overall market capitalisation of the Australian ETF sector was $4.9 billion as of 5 October.
The global market volatility is seeing investors continue to take up gold ETFs as a safe haven. The gold bullion ETF (GOLD) is the second largest Australian ETF by market capitalisation, standing at $712 million as of 5 October.
Trading volumes on international and currency ETFs are still proving popular, suggesting investors are "taking a view on the local fundamentals weakening", according to the review.
BetaShares head of investment strategy Drew Corbett said investors were looking to products that benefited from a weakening in the Australian market.
"While still maturing, the suite of ETFs available for investors continues to expand, allowing investors to benefit from a variety of market conditions," Corbett said.
AUTHOR
Recommended for you
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
The latest monthly Bank of America global fund manager survey has found investors are starting to shift cash into bonds as cash allocations reach a three-year low.
AUSIEX analysis has discovered the net traded value of Australian dollar fixed income ETFs more than doubled from January to April, reflecting growing investor demand.
