Cash and fixed income ETFs attracted $1.3 billion in inflows in May, a sharp rise from just $366 million the previous month, according to the firm’s latest monthly ETF report.
Of the May total, $761 million flowed into Australian bond ETFs, $307 million into global bond ETFs, and $233 million into cash ETFs.
Half of the top 10 inflows were into bond ETFs, with Vanguard Global Aggregate Bond Index (Hedged) seeing the largest flows at $306 million.
The strong flows were double those of the second-largest flows of $152 million which went into Betashares Australian High Interest Cash ETF.
Three Betashares ETFs rounded out the fixed income exposure: Betashares Australian Investment Grade Corporate Bond ETF ($87 million), Betashares Australian Composite Bond ETF ($85.9 million), and Betashares Australian Bond Senior Floating Rate Bond ETF ($84.2 million).
The flows vastly outpaced those into international and Australian equity ETFs which both experienced inflows of less than $1 billion during the month. International equities gained $929 million and Australian equities gained $752 million compared to $2 billion and $1.6 billion respectively in April.
Ethical international equity ETFs were particularly badly affected by outflows, losing $217 million across the Betashares Global Sustainability Leaders and Betashares Global Sustainability Leaders (Currency Hedged) ETFs.
Overall net inflows for the month across the industry were $3.8 billion which pushed total funds under management to $273.7 billion.
Speaking to InvestorDaily’s sister title Money Management last month, JPMAM’s global head of ETFs, Travis Spence, said he could foresee a boom in fixed income ETFs, especially those in the active space.
“One of the areas we are seeing particular interest from institutional investors is in fixed income which is traditionally an active asset class that can be difficult to access. They don’t always trade on a daily basis, so ETFs offered via the secondary market offer an extra layer of liquidity and that’s an additional benefit. That will be an area of growth going forward.”
Earlier this year, Betashares launched a range of three corporate bond ETFs to offer investors a defined income with diversification and transparency. The Betashares Defined Income Bond ETF range consists of three fixed income ETFs offering attractive income and a defined maturity date and investing in a portfolio of investment-grade corporate bonds that mature in either 2028, 2029, and 2030.
