Australia's exchange-traded fund (ETF) industry's assets under management (AUM) peaked at $5.5 billion in August, according to BetaShares' August Australian ETF review.
A rise in underlying asset prices was cited for the 1.9 per cent increase in AUM from July. The review showed no growth in units outstanding and no new cash inflows for the month.
While there were continued inflows into high-dividend and cash ETFs, reflecting sustained investor demand for income, BetaShares also noted an uptick of net inflows into international ETFs and the US Dollar (USD) ETF.
"The fund flows to international ETFs indicate investors believe it may be an opportune time to purchase overseas equities due to local currency strength, with buying across the S&P 500 and Global 100 ETFs," BetaShares head of investment strategy Drew Corbett said.
"Alternatively, they are taking a view of the high Australian dollar declining from current highs through the USD ETF."
The review also showed a 21 per cent dip month-on-month in ETF trading values, suggesting market volatility had subdued investor risk appetite.
"While we saw a glimpse of risk-on activity during July, investors have again retreated to the sidelines this month," Corbett said.
While funds flowed to yield and international products, BetaShares noted commodities were still the best-performing ETFs for the month.
"We continue to see the commodities story providing opportunities for investors who look outside of traditional equities strategies," Corbett said.
