Investors favour ‘vanilla’ ETFs despite specialist launches
Despite the influx of specialist exchange traded funds (ETFs), investors are still most keen on ‘vanilla’ products focused on Australian equities.
According to data from ETF Securities, the highest turnover for the week ending 2 April was seen in Vanguard Australian Shares Index ETF and the SPDR S&P/ASX 200 fund which had turnover of $21.1 million and $16.4 million respectively.
Meanwhile, the best inflows were seen by the BetaShares Australia 200 ETF which saw inflows of $79.9 million and the iShares S&P/ASX 200 ETF.
Since the start of the year, both the iShares fund and the Vanguard fund had seen the largest turnover and largest inflows out of all available ETFs.
Over one year to 7 April, 2021, all four funds had performed broadly in line with the ASX 200 return of 35.5% with returns being highest for the SPDR fund which returned 36.8%, according to FE Analytics. This was followed by 35.7% for Vanguard, 35% for BetaShares and 34.2% by the iShares fund.
However, the Vanguard fund was far larger than the other three funds at more than $18 billion in assets under management.
Kanish Chugh, head of distribution at ETF Securities, attributed the high ranking of these funds to the frequency of use by financial advisers and retail investors.
“It is fairly common to see this [trend], these funds are core building blocks for people’s portfolios. For global funds, there is far more choice and more thematic funds whereas for Australian equities, these funds are the core building blocks,” he said.
While it was domestic Australian equity ETFs which were favoured for flows, it was those focused on global equities which reported best performance over the period.
The best-performing funds, according to ETF Securities, for the week in question were ETFS Ultra Long NASDAQ 100 Hedge Fund and VanEck Vectors Global Clean Energy ETF, which was only launched last month, which returned 10.2% and 8.1% respectively.
AUTHOR
Laura Dew
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