In its half-year review of the Australian ETF market, BetaShares found the industry saw a strong inflow of new money into the sector, totalling $970.2 million for the six-month period.
Investors were particularly attracted to those products with exposure to international equities ($500 million) and high yield ($300 million).
“The local ETF industry continued its rapid rise, mirroring the fast growth we are experiencing around the world,” Alex Vynokur, managing director of BetaShares said.
The trading value of the ETFs in Australia also increased by 21 per cent, the best performing product being iShares’ S&P Global Healthcare, which returned 34.6 per cent.
However, the options available to Australian investors were reduced, with six products being taken off the market and only one product launch (the SPDR S&P World Ex Australia Fund).
“The Australian ETF industry continues to mature and experienced the first ETF closures on the ASX this last month, with Market Vectors Australia removing all six of their existing products from quotation,” Mr Vynokur stated.
“However, we are beginning to see real traction with investors and advisers who are utilising the key benefits of ETFs - low cost, transparency and liquidity. Based on this, we predict increased new product activity during the second half of the year and for the market to end at some $9 billion in assets under management by the end of the year.”
The specialist provider of fund products also found that the ETF sector in Australia grew by three per cent in the month of June, with a total of $212.4 million of extra investor inflows.
A majority of that extra capital was directed to domestic equities ($63.6 million), Australian high yield ($43.8 million) and currency ($28.1 million) ETFs.
“The ETF industry is fast becoming a barometer for investor sentiment towards asset classes ...[and] currency ETFs continued to trade heavily after the RBA’s interest rate cuts in May saw the Australian dollar plummet almost 10 per cent against the greenback and other major currencies,” Mr Vynokur said.
The trading value of ETFs in the Australian market did decrease by eight per cent with the strongest performer for June being the ETF’s Brent Crude Oil product returning 6.7 per cent.
