Net inflows into fixed income ETFs tops international equities
Net inflows into fixed income exchange traded funds (ETFs) have overtook international equities for the first time ever in the first half of the year, according to BetaShares’ 2019 Half Year Review.
Also, at the end of June, the Australian ETF industry surpassed the $50 billion milestone in funds under management (FUM), growing 25 per cent in six months.
According to the study, almost half of that growth ($4.4 billion) came from net inflows while trading volume remained strong and increased by 11 per cent year-on-year.
The first half of the year also saw investors significantly increasing allocations to fixed income ETFs - in particular, Australian Bonds – with the category taking in almost $1.4 billion of new money.
Additionally, in June fixed income overtook international equities to become the number one category for net inflows, with international equities receiving $1.3 billion.
“Australian investors now have access to a wide range of ETFs, providing them with the tools to invest into all major asset classes, sectors and regions. At $50B we believe that the Australian ETF industry is now well and truly ‘on the map,” the firm’s managing director, Alex Vynokur, said.
“Over the past few years, ETFs have become a popular choice for Australian investors to diversify their portfolios, which were traditionally very skewed towards local equities”.
The ETF industry grew by $2.25B (or 4.6 per cent) in June over its previous month, marking the second highest funds under management monthly growth of all time. Net new money accounted for $821.7 million of the FUM surge over the past month.
Recommended for you
Rather than gathering new clients and launching new products, the key focus of asset managers right now is to ensure their existing clients are top priority in a bid to prevent outflows.
With US$4.45 million being the global average cost of a data breach in 2023 alongside the rapid explosion of AI, WTW has emphasised why governance efforts are critical in cyber risk management.
The ETF industry experienced $1.7 billion market cap decline in April, according to Betashares, even with positive inflows driven by international equities products.
Sophia Rahmani has officially begun her new role as managing director of Magellan with the intention to move to CEO within 12 months.
