The Australian exchange traded product (ETP) saw a solid growth in November despite the share market fall and is expected to see a continued strong growth in 2019 as a result of the outcome from the Royal Commission, according to the VanEck ETF IQ Scorecard.
The Australian ETP industry grew 15.4 per cent to $40.7 billion over the 12 months to 30 November, 2018, and experienced net inflows of $586 million over the month while the S&P/ASX 200 accumulation Index fell 21 per cent, according to the study.
At the same time, exchange trade funds (ETFs) made up over 90 per cent of ETPs, in terms of assets under management.
According to VanEck’s managing director, Arian Neiron, Head of Asia Pacific, said that investors took advantage of broad market weakness in November to broaden their portfolios and invest in international assets in particular, but also Australian equities and fixed income.
"We also saw more active managers enter the market. Of the seven new products in November, four were exchange traded funds (ETFs) and three active ETFs, which are introducing more competition for ETFs, which make up almost 90 per cent of the ETP industry. All of this is contributing to the growth of the sector," he said.
"We expect the ETP industry to keep growing in 2019. The revelations at the Hayne Royal Commission highlight the conflicts of interest and high fees. One of the biggest beneficiaries of any increased regulation will be ETFs as investors and their advisers seek transparent, cost-effective and targeted investment outcomes.”