ETF industry loses $5b in January after market volatility
The Australian exchange traded fund (ETF) industry has started 2022 negatively with losses of $5 billion during January.
According to the monthly report from BetaShares, January saw assets under management fell 3.7%, some $5.1 billion during January.
This was despite inflows of $1.5 billion during the month to end with $131.8 billion.
“With global and Australian sharemarkets falling steeply in the first month of 2022, positive inflows were not enough to combat a drop in asset values, which led to a negative start for the Australian ETF industry,” it said.
The industry ended 2021 at an all-time high of $136.9 billion, growing 44% during the year.
In light of the volatility, monthly trading values increased by 26% to reach its second-highest monthly level on record of $10.3 billion. BetaShares said this had been a growing trend during market volatility as investors took advantage of the liquidity offered by ETFs to express market views.
The majority of inflows went into international equities, which gained $641 million, followed by Australian equities which increased by $410 million.
There were also large inflows into defensive ETFs such as iShares Enhanced Cash ETF, BetaShares Australian High Interest Cash ETF and iShares Government Inflation ETF which gained $107 million, $100 million and $56 million respectively. As a sector, cash ETFs saw inflows of $207 million.
Recommended for you
As ASIC chair Joe Longo pushes firms to prepare for the upcoming mandatory climate disclosure regime, what skills are necessary if firms are looking to expand their ESG teams?
First Sentier Investors has announced it will close four of its Australian investment teams amid a simplification of the business, with $14 billion expected to be returned to investors.
Over 90 finalists have been chosen to compete at the 36th annual Fund Manager of the Year Awards, to be held in Sydney on 13 June.
Clients may be asking their adviser whether there is still value in the US technology names after their rally, but Fidelity International’s Lukasz de Pourbaix believes they can still offer upside.