The local exchange-traded fund (ETF) market attracted $3.2 billion in investor inflows during October – marking the second highest level for monthly flows on record, according to Betashares.
Notably, year to date (YTD) industry net flows amounted to $23.7 billion at the end of the month, surpassing the previous annual record of $23.2 billion set in 2021.
“This trend is very similar to the experience overseas, with 2024 set to be a record breaking for the ETF industry both home and abroad,” Betashares said.
Strong net flows, combined with positive market movements, were also able to push the Australian ETF industry to a new all-time high in assets under management, which added 2.5 per cent over October to $232.5 billion.
Moreover, ASX trading value was slightly higher month on month, at some $11.9 billion.
According to Betashares, there were also four new funds launched in October, including a moderately geared exposure to the Nasdaq 100 (GNDQ) and the Global Defence ETF (ARMR). Conversely, a climate transition-focused active ETF was closed.
Turning to performance, the new data showed that Global X Physical Palladium (ETPMPD) led with a return of 19.3 per cent.
It was followed by Betashares Crypto Innovators ETF (CRYP) at 18.8 per cent, Monochrome Bitcoin ETF at 18.1 per cent, and bitcoin ETFs offered by DigitalX and Global X with growth of 17.4 and 17.2 per cent, respectively.
In a separate report issued by VanEck, cryptocurrency ETFs were similarly celebrated for having had a standout month.
“Bitcoin, viewed by many as a ‘Trump trade’, had a blistering month, consistent with the ’Uptober’ trend that has often seen the price of bitcoin rally into the end of the year,” VanEck wrote.
According to the firm, global carbon futures also experienced a “180-degree turnaround”, going from being one of the bottom performers last month to ending October on a high, as regulators in the US and the UK enforced tighter carbon emission controls.
Regarding product flows, VanEck revealed that three funds took the lion’s share, including the Vanguard Australian Shares Index ETF (VAS), Vanguard Global Aggregate Bond Index (Hedged) ETF (VBND), and Vanguard MSCI Index International Shares ETF (VGS).
In terms of industry segments, international equity, unsurprisingly, maintained its lead in October, with $1.62 billion in new investor dollars.
“Flows into Australian equity were relatively subdued,” VanEck said, “however, Vanguard’s VAS topped the list overall for the most flows this month.”
Namely, local equity ETFs saw $318.3 million in flows.
“For fixed income, there was somewhat of a risk-off sentiment, however it appears investors did not have a particular view on duration and were aiming for broad exposure,” the firm said.
