The exchange traded fund (ETF) industry’s funds under management rose by 6% for the first half of 2020 at $65.8 billion, with a record $8.3 billion in new money despite a tumultuous six months, according to BetaShares.
BetaShares found inflows were double those for the first half of 2019 and triple those in 2018. Australian exchange traded products also experienced 88% more trading value than in the previous six months, following the record $18 billion traded in March, and trading values were maintained at $8 billion each month since then.
Betashares chief executive, Alex Vynokur, said: “The record trading volumes over recent months in particular indicate that Australian investors are increasingly turning to ETFs to express their investment views, attracted by the liquidity ETFs have provided in some of the most volatile markets we have ever seen”.
Australian broad equity products had been dominant so far in 2020 as it received more than 1.5 times the flows ($3.5 billion) of the next largest category – global equities ($2.1 billion).
Inflows into commodities ETFs also jumped, as investors turned to gold as a safe haven exposure, and increased their exposure to oil in response to global oil market volatility.
“We have seen a significant increase in demand for short products as both investors and advisers seek out ways to hedge their portfolios,” Vynokur said.
“We saw this initially in March as the market declined but have seen sustained interest through June notwithstanding the strong market rebound, with many investors continuing to believe that fundamentals remain fragile.”
BetaShares noted that it expected the total industry FUM at the end of 2020 to be between $72 billion to $78 billion.
