Strong ETF inflows fail to improve FUM in October
The exchange-traded fund (ETF) industry has recorded another month of industry declines, despite seeing the second-highest level of net flows this year to date.
Betashares recorded a 1.9 per cent month-on-month decline in the Australian ETF industry for October, or a total monthly market cap decrease of $2.8 billion.
This was the second month in a row for ETF falls. In September, the market saw a 2 per cent month-on-month industry decline.
Industry funds under management (FUM) for the month was $150.1 billion, some $6 billion shy of the all-time high of $156.1 billion recorded in August.
While the market fell overall, investor demand for ETFs remained unaffected with strong inflows of $1.8 billion. Betashares said this was the second-highest since the start of the year, following August’s largest recorded inflows of $2.2 billion.
“The second-highest net flows of the calendar year were not enough to combat a decline in asset values, as global sharemarket falls caused the industry to decline in October, in a very similar pattern to that experienced in the prior month,” remarked Ilan Israelstam, chief commercial officer.
Australian equities exposures attracted the greatest interest from investors, accounting for 50 per cent of the month’s flows at $882 million followed by fixed income ETFs at $548 million. International equities reported $289 million in inflows and cash saw $71 million.
“Cryptocurrency exposures were the best performers in October, followed by geared short Australian equities funds which rallied 10 per cent for the month as the Australian sharemarket fell,” Israelstam observed.
The Global X 21Shares Bitcoin ETF was the highest performing product in October at 29.8 per cent.
Looking at outflows, the Magellan Global Fund (Open Class) (Managed Fund) saw the greatest declines at $158 million.
Compared to previous months, the ETF provider said October was a quieter month in terms of fund launches with just one launch of the Betashares FTSE 100 Currency Hedged ETF.