ETFs continue upward growth
Exchange traded funds (ETF) have continued their growth trajectory recording another new level of growth by reaching $10.7 billion in assets under management at the end of March.
Cash flows for the month were $265 million pushing 2014 flows to $685 million, a 40 per cent increase on the first three months of 2013.
SPDR ETFs head Amanda Skelly said this growth showed little signs of slowing down throughout the year as the global market for ETFs continued to also grow, reaching $2.45 trillion in assets under management at the end of March.
However local ETF investors acted contrary to their global counterparts — who invested in value-based equities over fixed income and cash — by looking towards defensive ETFs of fixed income and cash while moving away from Australian equities.
However international equities ETFs continued to draw the most attention, according to Skelly, who said the interest was the result of a high Australian dollar and less-than-expected performance from the local equities market.
At the same time concerns over the concentration of the Australian equities market in the areas of financials and materials were pushing self-directed investors to consider international equities via ETFs with stronger performance in overseas markets during 2013.
Recommended for you
The possibility of a private credit ETF is looking unlikely for now with US vehicles seeing limited uptake, according to commentators, but fixed income alternatives exist that can provide investors with a similar return.
Ahead of the approaching end of the financial year, State Street has shared five tips for advisers who are using ETFs in their client portfolios.
The use of active ETFs in model portfolios by financial advisers is a key factor in the growth of the products for iShares, according to BlackRock.
Global asset manager BlackRock has identified bringing private markets to the wealth channel as a key business area for the firm that could generate US$500 million in revenue in the future.
