Australian ETF industry reaches $36.9b in February
Australian exchange trade fund (ETF) industry has reached $36.9 billion in funds under management (FUM) in February, despite declines in global markets, according to the BetaShares Australian ETF Review February 2018.
However, all the growth came from new money rather than asset appreciation as global share marketed posted negative returns, the report said.
Total FUM grew by $339 million, or one per cent, for the month.
In terms of the asset categories, international equities saw the largest inflows, which accounted for $219 million in inflows, and were followed by fixed income and Australian equities which received over $115 million in inflows.
Last month also experienced a spike in volatility in global sharemarkets which translated into strong trading activity, with the Australian ETF industry seeing its second highest trading value on record with over $3.5 billion traded.
BetaShares’ chief executive, Alex Vynokur said: “February’s trading volumes highlighted the liquidity benefits of exchange traded products as market volatility rose.
“To illustrate this, during the month, we saw many investors using exchange traded products not only to take long positions during the dip, but also to hedge portfolios using short products,” he said.
According to him, February also saw increased use of ETFs by Australian institutional investors, but at the same time, cash ETFs received the highest level of outflows due to institutional portfolio re-allocations.
“It’s a sign of maturity of our industry that institutions are now using ETFs to express sector views as well as using Cash ETFs for portfolio allocations – we are confident that such institutional usage will continue to grow over time,” Vynokur said.
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