Despite the weaknesses in equity market, the Australian exchange traded fund (ETF) industry set another record ending October with $57.2 billion in funds under management (FUM), driven by net inflows of $1.2 billion, according to BetaShares Australian ETF Review – October 2019.
As far as the asset classes were concerned fixed income ETFs attracted the highest number of $372 million in net inflows, of which $317 million went into Australian bonds and were followed by international equities ($368 million).
The firm said in the report that Australian Financial Sector products saw the biggest outflows possibly due to “profit taking ahead of what was expected to be a difficult profit reporting week in early November.”
At the same time, the market continued to see outflows from European equities as the investors in the region became more cautious.
“October was a particularly strong month for ETFs, especially given the muted performance of equity markets. Investors are recognising that they can use ETFs to position their portfolios for a range of market conditions,” said BetaShares’ chief executive, Alex Vynokur.
“This is reflected in the continuing strength of flows into fixed income products, as investors increasingly appreciate the defensive benefits and diversification that fixed income ETFs can provide.”