Global equities propel rising ETF inflows
Two reports from Betashares and Vanguard have seen renewed investor interest in global equities, a key driver of the second highest exchange-traded fund (ETF) inflows this year to date.
The robust ETF inflows of $1.7 billion in September was underpinned by the $583 million inflows from international equities, the highest category this month.
This compared to flows in August when international equities saw just $74 million in inflows at the expense of Australian equities which gained $1.1 billion.
“For only the second time in the last 12 months, we saw a return to meaningful inflows in the international equities ETF segment,” Ilan Israelstam, co-founder and chief commercial officer of Betashares, observed.
“It appears as though ETF investors are making a return to equity investing after focusing heavily on fixed income exposures for the majority of the year to date.”
Quarterly research from Vanguard also supported these findings with international equity ETFs returning to positive flows in the third quarter. Flows rose to $845 million in Q3 2023 compared to outflows of $463 million in the second quarter of the year.
“Stronger flows into equity ETFs in Q3 suggests investor confidence is returning, likely a result of stabilising interest rates over the last few months in Australia,” said Adam DeSanctis, Vanguard’s head of ETF capital markets for Asia Pacific.
Vanguard also described a ‘resurgence’ of Australian equity ETFs in Q3, the strongest quarter for the category this year, which attracted $1.9 billion in cash flows, an increase of 105 per cent from Q2.
Overall, Betashares reported a 2 per cent month-on-month industry decline in September, causing total industry funds under management to fall to $152.9 billion.
Following an 8 per cent month-on-month growth in ASX ETF trading value in August, September saw a 20 per cent decline to a trading value of $9 billion.
The industry has grown by 22.9 per cent, or $28.5 billion, over the last 12 months.
September was also a busy month for fund launches, with nine new ETFs entering the market.
This included the launch of two Betashares US Treasury Bond ETFs, as well as five ETFs launched on the ASX by VanEck, Global X and iShares, largely in the government bond and
Two new funds were launched on Cboe, which were active ETFs from Coolabah Capital (active short term bonds) and an active emerging markets equity ETF from JPMorgan.
The Betashares Global Uranium ETF was the highest performing product in September for the second month in a row. The product grew by 24.3 per cent after a rise of 15 per cent in August.
Other strong performers included the Global X Uranium ETF at 14.5 per cent and the Global X Ultra Short Nasdaq 100 Hedge Fund at 13.6 per cent.