Appetite for ETFs not dropping off yet
International equities-based exchange traded funds (ETF) have overtaken the Australian equities-based ETFs in terms of product numbers and annual growth according to a recent overview of the market.
In a market report, compiled by automated investment adviser and fund manager Stockspot, international share ETFs have overtaken Australian share ETFs as the largest sector in the exchange traded space adding 13 of the 17 new ETFs released in the past year.
At the same time the international share ETFs sector has grown by 95 per cent for the year to $6.9 billion of funds under management, compared with $5.09 billion for Australian share ETFs, with the average international ETF return up 28 per cent over the past 12 months.
Stockspot chief executive Chris Brycki said the new funds that have been launched show that investors are attracted to themes that have strong past performance but warned against chasing the performance of international ETFs.
He pointed out that commodity markets and ETFs across those markets were once very popular but had the weakest performance and slowest growth for the year with the average commodity ETF losing 11 per cent of value for the past 12 months.
However new ETF products continue to reach the market with K2 Asset Management set to launch an ‘active exchange traded fund' once the fund receives trading status on the ASX market.
The new fund — the K2 Global Equities Fund — will be an ASX listed version of its existing K2 Global High Alpha Fund and has an expected trading date from the middle of next month.
The rollout of the K2 fund follows that of Magellan which released an ASX quoted version of the Magellan Global Fund in early March. Like that fund K2 will also oversee the operation and management of the fund and be its own market maker.
The appetite for ETFs has been demonstrated with Van Eck Global reporting that the Market Vectors Small Cap Dividend Payers ETF has attracted $25 million in inflows in three weeks since launch.
The boost to the ETF was provided by specialist ETF strategist Implemented Portfolios which picked up the ETF for use in its managed account products.
Van Eck Global Australia Managing Director Arian Neiron said the investment confirms the broad appeal of the ETF which invests in companies that pay a dividend and that have liquid stocks.
AUTHOR
Jason Spits
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