ETPs set to overtake LICs

Exchange traded products (ETPs) are close to overtaking listed investment companies (LICs) in market capitalisation, according to ETF Securities.

According to data from the Australian Securities Exchange (ASX) for January, ETF assets increased to $42.14 billion which translated into a gain of 4.3 per cent since December 2018.

The market capitalisation of LICs and LITs stood only slightly above $42.21 billion, but the growth rates of ETFs were well above those of LICs.

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“The ETF market looks set to eclipse the long-established Australian LIC market as investors deploy ETFs in their portfolios in different ways and for more than just core holdings,” ETF Securities’ chief executive, Kris Walesby, said.

“These types of funds offer equity-heavy Australian investors an easy way to diversify their portfolios. Gold is a great example, having appreciated by more than 10 per cent in the past four months.  That compares with the S&P/ASX 200 which dropped by more than five per cent.”

According to Walesby, fixed income, commodity and infrastructure funds saw the biggest total asset growth since the end of September.


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