New money drives ETF FUM growth
Net inflows has helped lift the Australian exchange traded fund (ETF) industry by 2.6 per cent to a new record high of $29 billion in funds under management (FUM), according to BetaShares’ review.
The BetaShares Australian ETF Review – May 2017 found that the month’s industry growth was driven mostly by net new money ($657.8 million) rather than asset appreciation.
Australian equities saw the highest inflows with broad Australian exposures the most popular funds in May, with the best performing exposures being Asian equities, particularly Korean, followed by the Australian Equities Strong Bear Hedge, which experienced positive performance of 7.6 per cent and benefited from the decline in the Australian market.
According to BetaShares’ managing director, Alex Vynokur, the continued growth of the ETF industry in May, despite the decline of the Australian share market, showed its resilience and versatility for investors.
“It’s is exciting to see the industry approach the $30 billion milestone,” he said.
“We are confident this growth trajectory will only get stronger as investor demand and innovation drives more product launches to suit a diverse range of investor needs.”
In April, two new products were launched on the Australian Securities Exchange (ASX): the VanEck Vectors Australian Corporate Bond Plus (PLUS) and the UBS IQ Cash ETF (MONY), bringing the total number of exchange traded products on the ASX to 206.
“Over the next quarter, we expect to see more products based on the cash and fixed income asset classes launched, as investors seek income solutions outside of the volatile equity market,” Vynokur said.
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