The Australian ETF industry now manages more than $100 billion and will grow another 25 per cent through 2021 off the back of strong investor demand, according to BetaShares.
“The Australian ETF industry has emerged from a year of uncertainty in a strong position. While we have recently seen some retail traders overseas caught up in speculative activity in particularly volatile stocks, investors more broadly continue to recognise the benefits of ETFs in establishing a resilient long-term portfolio. We are excited to see what the rest of 2021 brings,” said BetaShares chief Alex Vynokur.
BetaShares itself saw assets under management swell from $10 billion to $16 billion through a “record breaking” 2020. Technology ETFs have been the “recent standout”, with Asian technology – and BetaShares’ corresponding Asian Technology Tigers ETF – faring particularly well over the year to March. BetaShares’ NASDAQ 100 ETF was also up 39 per cent for the period, driven by the meteoric performance of the US tech giants.
Mr Vynokur now anticipates that investors will increasingly turn their attention towards ethical and ESG ETFs amid “widespread and growing concern” around global warming and more sophisticated options becoming available in the market in 2021.
“We think this interest is likely to continue as the global economy emerges from the COVID-19 pandemic. As economies open up again, investors will have a chance to look for portfolios and companies whose practices align with their ethical values, including less reliance on fossil fuels, stronger corporate governance and, partly as a result of the pandemic, increasing awareness of ‘social’ (the S in ESG) factors,” Mr Vynokur said.
“We expect ethical ETFs will continue to set a strong pace in 2021, with more ethical products to be launched to tap into investor demand.”
