Australia’s ETF sector ended May at a high of $48.7 billion in funds under management, with all of its monthly growth coming from net inflows, according to a new report.
The BetaShares Australian ETF Review – May 2019 showed that the industry received around $1 billion in net new money during the month, with its monthly total market cap increasing by 1.4 per cent.
ETFs were also reported to reach a record in terms of trading value, with more than $4 billion of value traded over the month for the first time.
Australian shares and bonds received the highest amount of flows, with both categories receiving around $250 million in net flows.
“Fixed income ETFs have received significantly more attention this year than ever before as investors continue to exhibit caution on the equities market,” Alex Vynokur, chief executive of BetaShares, said.
“Year to date, fixed income is the number one category for flows in the industry, marginally beating out the ever-popular international equities category.
“Investors are increasingly realising the benefits of ETFs in obtaining targeted exposure to this asset class, with the breadth of the fixed income ETF product range now allowing investors to build bond portfolios which are tailored to their specific needs.”
Further concern around escalating US-China trade war tensions caused American equities to fall, which BetaShares said slowed the rise of the Australian ETF industry.
The top performing fund in May, BetaShares US Equities Strong Bear Hedge Fund, received an approximate 16 per cent monthly return, performing strongly on the back of the market drop.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].