Inflows into the exchange-traded fund market are becoming a useful way to gauge investor sentiment, according to BetaShares head of investment strategy Drew Corbett.
For example, the largest outflows from the sector in June (almost $5 million) came from the Xinhua China 25 ETF, which Corbett suggested was triggered by reports of a slowdown in the Chinese manufacturing sector.
In addition, the turnover of the US dollar ETF tripled in May following a weakening of the Australian dollar, he said.
The most popular product in the $5.2 billion ETF market continues to be the High Interest Cash ETF, which attracted $7 million over June, said Corbett. The high dividend ETFs saw combined inflows of $13 million for the month.
"We are continuing to see the yield play being popular with investors as they seek shelter from market volatility," said Corbett.
The top performer for the month of June was the agriculture ETF which saw growth of 14 per cent, said Corbett. Financial sector equities ETFs also grew by 4.8 per cent, he added.
"While agriculture and financials were the top performers, flows into these funds were subdued. This also occurred in May when bond ETFs were the best performing but received very little new money.
"While there are opportunities in a volatile market, investors are still playing defensive, sticking with familiar asset classes," Corbett said.
