The Australian exchange-traded fund (ETF) market has reached $7.12 billion in assets under management, a record high according to BetaShares' Australian ETF Review for March.
According to the Review, March represented the sixth month in a row where the Australian exchange-traded fund industry had achieved record levels of assets, with new inflows being approximately $107 million.
Year-to-date new inflows of $353 million represent the best first quarter performance domestically and are consistent with international trends as the global exchange-traded products industry set a new first quarter inflow record of $70.1 billion.
Commenting on the result, Alex Vynokur, managing director of BetaShares, said that while February had seen large flows to international equities, the pendulum had now swung back to domestic equities-based products.
"This is reflective of global markets where equities accounted for 93 per cent of flows, with a bias towards developed over emerging markets," he said.
Vynokur said that despite high first quarter inflows across exchange-traded products (being equities-based products), the cash ETF was the most popular in terms of new inflows during March, indicating a desired investor balance between stability and growth.
"While investor sentiment and trading values continue to rise, there is still cautiousness around capital growth being exhibited by investors, with 65 per cent of the inflows this month attributed to cash or yield-based strategies," he said.
"(And) despite a wave of launches resulting in 25 new exchange-traded products last calendar year, 2013 has seen reduced activity," Vynokur said.
"This can be attributed to a maturing sector, with all the major asset classes now represented by exchange-traded products; however we predict greater new product activity in the second half of the year."
