The Australian exchange traded product (ETP) industry experienced inflows of $1.66 billion in May, with significant flows directed at Australian equity ETPs, according to VanEck.
VanEck said the month of May was the fourth highest monthly level, and a large increase from $1.07 billion in April. The Australian ETP industry currently stood at $63.77 billion, of which exchange traded funds made up 90%.
Australian equity ETPs attracted $739.6 million in May, with the S&P/ASX200 index rallying 4.7%, the fund manager said.
VanEck noted that over the year to 31 May, 2020, almost half of all ETP net flows had gone into Australian equities at $3.16 billion.
VanEck managing director and head of Asia Pacific, Arian Neiron, said: “Local and offshore investors are investing heavily in Australian companies, which are still relatively undervalued compared to more expensive share markets such as the US.
“Gold ETFs too remained popular as a defensive strategy, drawing $109 million of inflows, while fixed income ETFs staged a rebound after outflows during March and April.”
VanEck data said flows into commodity ETPs totalled $142.4 million in May, while fixed income ETP flows totalled $182.7 million dollars, with the majority going into Australian fixed income ETFs. International equity ETPs drew inflows of $504.3 million, with most flowing into developed markets such as the US.