The exchange-traded fund market is moving from “strength to strength”, provider BetaShares has argued in a new report reflecting on 2014.
Titled BetaShares Australian ETF Review: Year End 2014, the report found the ETF industry achieved its highest-ever level of annual growth in 2014, with funds under management increasing by up to 50 per cent on the previous year.
A new record high of $15 billion is now held under management in ETFs, the report said.
Net inflows contributed to 86 per cent of the annual growth of the market in 2014 and approximately $4.3 billion of new money was deployed in ASX-traded ETFs, an increase of 180 per cent compared to net inflows in 2013, according to the report.
Trading activity also hit a new high with an increase of 37 per cent in trading value over the year, the report said.
Managing director of BetaShares Alex Vynokur said the ETF sector was gathering momentum with investors.
“The Australian ETF market went from strength to strength in 2014.
“Products providing exposure to developed market international equities, particularly the US, were the largest beneficiary of inflows throughout the year, attracting approximately $1.4 billion.
“Australian high-yield equity products attracted $720 million of new money, demonstrating the continued desire of investors for income, particularly as capital growth stalled in 2014," he said.
Mr Vynokur predicted the industry would continue to perform well over the coming 12 months.
“Notwithstanding back-to-back years of +50% growth, we believe the Australian ETF market will continue to grow strongly in 2015 and forecast that total funds under management at the end of 2015 will be in the range of $21–23 billion,” he said.
“We also expect that the number of product launches will be significantly higher in 2015.”
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