ETFs uptake surges as investors hedge against uncertainty: State Street
Australian investors are increasingly turning to exchange traded funds (ETFs) to tap into the benefits of offshore investments, with the sector surpassing $15 billion in funds under management.
State Street Global Advisors head of SPDR ETFs, Amanda Skelly, said the industry hit the milestone after a record-breaking December, when $672 million followed into the category.
She said the continued growth of the ETF industry represented 50 per cent year-on-year growth, largely driven by interest in international-based ETF, came as "no surprise" despite fears about the stability of the Eurozone, and forecast further growth in 2015.
"Local investors will continue to seek opportunities that tap into the diversification benefits of investing offshore this year and Tuesday's fall in the ASX 200 put a spotlight on the current volatility in the local market," Skelly said.
"Materials and energy make up a large percentage of our market and with lower commodity prices and the possibility that disappointing growth in China will negatively impact our exports, the reaction comes as no surprise - and investors are therefore seeking opportunities overseas."
Skelly added that ETFs could provide investors with an opportunity to manage their currency risk.
AUTHOR
Nicholas O'Donoghue
Recommended for you
Three fund managers have made appointments to their distribution teams, focusing on the firms’ relationships with financial advisers.
Global X analysis has revealed the Australian ETF market has grown by more than a third in the past year, driven by net inflows, which are almost double the pace of 2024.
Shareholders at Platinum Asset Management have voted on the decision to merge the firm with L1 Capital, creating a $16.5 billion combined fund manager.
Investment manager Woodbridge Capital has appointed Ben Evans as executive director, origination, joining the firm from Metrics Credit Partners.
