ETP industry at all-time high
Australia's exchange traded products (ETP) industry has reached a record high in August, ending the month at $23.5 billion, which reflected investors' ongoing risk aversion towards global markets, according to VanEck.
Investors were increasingly investing in smart beta and active ETPs, with almost 70 per cent or $197 million of total Australian ASX ETP assets being invested in those products, as they aimed to improve portfolio outcomes and navigate volatility in global and domestic markets.
Investors also continued to favour defensive assets in August, with gold bullion and gold miners exchange-traded funds (ETFs) attracting $65 million year-to-date and with $25 million being invested in August.
At the same time, inflows into fixed income ETPs were also high, amounting to $63 million.
However, flows into the ETP industry were modest, but August saw a strong product development with five new product launches, bringing the total number of ETP products to 145.
According to managing director at VanEck Australia, Arian Neiron, product issuers understood that Australia's ETP industry was relatively immature and they were looking more at the long-term opportunities in Australia.
"Australia's ETP market has plenty of room to grow, however given subdued investor confidence, we forecast the ETP industry will end the year at about $26 billion," he said.
"Investors are still concerned about the outlook of the current low growth and low rate global environment and the unintended consequences of central bank intervention. This is reflected in ETP flows.
"This current activity in the gold markets indicates that investors have become more proactive, buying gold as a hedge against potential market turmoil."
AUTHOR
Oksana Patron
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
