Aussie bond ETF inflows triple in May

Australian bonds bonds fixed income ETFs

19 June 2024
| By Laura Dew |
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Australian bond ETFs saw monthly inflows triple in May to reach $324 million, according to Betashares.

Overall fixed income ETFs saw inflows of $455 million in May, almost double the flows seen in the previous month.

According to the monthly statistics from Betashares, fixed income saw the third-highest inflows in May behind international and Australian equities. This was almost double the $236 million in flows seen in April, which was a muted month for ETF flows overall. 

Breaking it down by subsector during May, Australian bonds saw $324 million in inflows which was significantly higher than $105 million seen in April. 

However, sentiment towards global bond ETFs remained low with flows falling by 39 per cent from $147 million to $89 million during the month. 

Although flows into fixed income products have improved, none of the top 10 ETFs by inflows sat in the space, the firm said, with major flows dominated by Australian equity funds such as Betashares Australia 200 ETF and Vanguard Australian Shares Index ETF.

On the contrary, three of the top 10 ETFs reporting the largest outflows were in this space. These were Franklin Australian Absolute Return Bond Fund (Managed Fund) which saw outflows of $18.4 million, Vanguard Australian Fixed Interest Index ETF lost $15.7 million, and ActiveX Ardea Real Outcome Bond Fund (Managed Fund) lost $12.7 million.

Recent ETF launches in the fixed income space include the iShares 15+ Year Australian Government Bond ETF, Betashares Australian Major Ban Subordinated Debt ETF, and the Macquarie Dynamic Bond Active ETF. 

Overall, the Australian ETF industry has grown by 34.5 per cent, or $50.9 billion, over the last 12 months.

Previous research by AUSIEX found demand for Australian dollar fixed income ETFs considerably increased between January and April. According to the firm’s adviser trading data, the net traded value (buy value less sell value) of Australian dollar fixed income ETFs more than doubled from January to April this year.

Similarly, inflows into global fixed income ETFs also rose steadily from January onwards.

 

 

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