The Australian exchange-traded fund (ETF) industry has experienced its highest-ever monthly net flows of above $3 billion.
Betashares’ monthly report has observed ETF inflows of $3.5 billion for the month of July – a new record for the industry. In comparison, June brought in flows of $2.6 billion while May received $2 billion.
This continues the long-running trend of investors using the new financial year as an opportunity to add to their portfolios, the report described.
“It was the first time that monthly flows have exceeded $3 billion, with the previous record of $2.9 billion being set in September 2021.”
Net flows accounted for approximately 33 per cent of the monthly growth, with the remainder coming from market appreciation and conversion activity.
These highest monthly net flows drove the Australian ETF industry to reach a new high in assets under management (AUM) at $215.6 billion. July saw the industry grow by 5 per cent for the month, with total market cap increasing by $10.3 billion.
Australian ETFs’ AUM recently surpassed the $200 billion milestone in June, thanks to solid gains on global equity markets and strong investor inflows.
“While these numbers reflect the ETF industry prior to the August market dip, early indications suggest that ETF investors are taking advantage of the current high levels of volatility with nearly $1 billion in net flows already recorded for August,” the report noted.
Looking at individual asset classes, international equities enjoyed a “standout month” with net flows of $1.6 billion – equating to approximately 45 per cent of the $3.5 billion overall flows.
This asset class gathered nearly double the amount of net flows of Australian equities, which was in second place at $891 million in net flows. Fixed income ranked in third position at $746 million.
Additionally, July saw six product launches in the ETF space, such as Betashares’ new Australian Momentum ETF and the Global X Australian Bank Credit ETF.
“Magellan also converted their closed ended MGF fund into units in MGOC, further adding to the industry funds under management (FUM) figure.”
The conversions saw Magellan report its highest FUM in almost a year at $38.4 billion since last August, when FUM was $39 billion.
July’s best-performing ETF products were those with exposure to US small caps, cryptocurrencies and gold miners, Betashares noted. The iShares S&P Small-Cap ETF performed 13.5 per cent, followed by the VanEck Gold Miners ETF at 13.4 per cent, and the Global X 21Shares Bitcoin ETF at 11.6 per cent.
