Aussie investors turned to ETFs in “record numbers” through the COVID-19 crisis, according to new research from BetaShares.
While the fall in asset values meant funds under management increase relatively slowly, net inflows to the ETF industry increased 90 per cent from the first half of 2019 to $8.3 billion – three times the amount of money that entered the industry in the first half of 2018.
“The last six months have been a turbulent time for investors, but the continued strength in both inflows and trading volumes is a big positive for the ETF industry,” said BetaShares CEO Alex Vynokur. “The record trading volumes over recent months in particular indicate that Australian investors are increasingly turning to ETFs to express their investment views, attracted by the liquidity ETFs have provided in some of the most volatile markets we have ever seen.”
Trading values have increased 88 per cent in the last year, heralding what BetaShares calls a “new normal” and maintaining $8 billion in trading values since March. Short products were heavily traded, with BetaShares’ BBOZ – which offers short exposure to the Australian – sharemarket, topping the list of the most traded products in the month.
“We have seen a significant increase in demand for short products as both investors and advisers seek out ways to hedge their portfolios,” Mr Vynokur said. “We saw this initially in March as the market declined but have seen sustained interest through June notwithstanding the strong market rebound, with many investors continuing to believe that fundamentals remain fragile.”
BetaShares is retaining its forecast from the end of 2019, expecting total industry FUM to be in the range of $72-$78 billion at the end of 2020.