Investors rally back into fixed income ETFs

Fixed income exchange traded funds (ETFs) saw the biggest flows in November while funds focused on Asia saw strong performance, according to BetaShares.

In the firm’s monthly report, it said the industry assets under management grew 3.4% to end at $136 billion. This was mostly from growth in the market with $1.1 billion attributed to net flows.

Fixed income ETFs saw the highest volume of flows at $333 million with “investors perceiving the worst may be over for further yield increases”, up from $308 million in October. This was closely followed by $330 million into Australian equities but this was a notable drop from October whe the sector saw inflows of $417 million.

Broken down further, Australian bonds saw $173.6 million in inflows and global bonds saw $153.7 million.

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This included $46.6 million into BetaShares Australian Govt Bond ETF and $45.5 million into Global X US Treasury Bond ETF.

However, these inflows were dwarfed by the iShares S&P 500 AUD Hedged ETF which saw inflows of $215 million during the month.

BetaShares noted the ‘China re-opening trade’ had also caused those ETFs focused on China and Asia to rally after a difficult period of performance. As such, these funds were the industry’s best performers in November.

iShares FTSE China Large Cap ETF returned 28.3%, BetaShares Asia Technology Tiger ETF returned 23.5% and iShares S&P Asia 50 ETF returned 21.3%. The former iShares fund was also among ETFs seeing the largest inflows at $44.6 million in November.