Fixed income ETP’s appeal declines

23 July 2020

The market share of fixed income exchange traded products (ETPs) declined from 30% in 2019 to just 3% in the first half of 2020 as investors favoured Australian equities instead. 

Data from VanEck for the first half of 2020 to 30 June found there had been a “complete overhaul” of favoured asset classes this year.  

With record outflows from February to June 2020, fixed income ETFs dropped from 30% of market share to 3%. 

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On the other hand, Australian equity ETPs’ market share increased from 24% to 44% and the sector saw 1.5 times the flows of the international equities. The market share of international equities declined slightly from 32% to 25%.  

Market share of ETPs  

Australian equities saw inflows of $3.6 billion during the six months compared to inflows of $2 million for international ones. Meanwhile, Australian fixed income only saw inflows of $202 million and international fixed income was even smaller at just $73 million.  

However, overall inflows were $8.2 billion, which Van Eck said, was an increase of 300% compared to the same period in 2018 and nine product launches took place during the period.  

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