The Australian ETP industry experienced net inflows of $586 million over November as the S&P/ASX 200 Accumulation Index fell 2.21 per cent, according to VanEck.
The ETP industry grew 15.4 per cent to $40.7 billion over the 12 months to 30 November 2018. Over the year to 30 November, international equity ETFs attracted $3.0 billion in net inflows, compared to $1.5 billion for Australian equities.
VanEck managing director and head of Asia Pacific, Arian Neiron, said investors took advantage of broad market weakness in November to broaden their portfolios and invest in international assets in particular, but also Australian equites and fixed income.
“VanEck’s IFRA saw strong flows, as investors sought the relative defensiveness of global infrastructure assets,” he said.
“We also saw more active managers enter the market. Of the seven new products in November, four were exchange traded funds (ETFs) and three active ETFs, which are introducing more competition for ETFs, which make up almost 90 per cent of the ETP industry. All of this is contributing to the growth of the sector.”
VanEck expects the ETP industry to keep growing in 2019 after the Hayne royal commission highlighted conflicts of interest and high fees.
“One of the biggest beneficiaries of any increased regulation will be ETFs as investors and their advisers seek transparent, cost-effective and targeted investment outcomes,” Mr Neiron said.
“Of particular note, smart beta ETFs are attracting greater market share as investors seek targeted investment outcomes. VanEck’s funds under management has jumped 58.4 per cent over the year to 30 November, the fastest of any ETF provider, with our rapid growth reflecting the popularity of smart beta ETFs,” said Mr Neiron.
“We expect the value of the ETP market will continue to rise given their clear benefits on price, transparency, liquidity and in many cases, superior performance.”