Drew Corbett, head of investment strategy at BetaShares

Australian ETF market edges towards AUD7bn

The Australian exchange-traded fund market is edging towards AUD7bn in assets under management. The industry hit a new record high of AUD6.8bn at the end of January 2013, according to BetaShares’ Australian ETF Review for January.

January represents the fourth month in a row the industry has achieved record highs with 5.9 per cent market capitalisation growth and new inflows of approximately AUD110m for the month. The best exchange-traded products by performance for the month were platinum followed by US and global international equities products.

“With the local market rallying approximately five per cent for the month, exchange traded fund investors bought both domestic and international equities products including the US, Europe and Asia indicating renewed investor appetite for growth oriented products,” says Drew Corbett, head of investment strategy at BetaShares.

As well as the positive inflow activity, this month also saw exchange traded fund trading values up 12 per cent, reinforcing the increasing levels of market conviction by investors. Another indicator of increasing investor risk appetite was that all exchange traded funds in the top 10 by net inflows were equities based, the first time ever for the BetaShares’ Australian ETF Review.

“While demand for risk based assets such as equities are on the rise, four of the top 10 exchange traded products in terms of net inflows were yield or income oriented, suggesting investors are dipping their toes back into the market, while keeping a fine balance between the stability of yield and capital growth,” Corbett says.
 
With a positive start to the year, the industry is well on track to reach AUD7bn in assets under management by the end of February and could well reach AUD9bn by the end of 2013 as predicted by BetaShares.

“January is traditionally a quiet month for trading activity but the volumes and interest from investors for the start of the year suggests the exchange traded fund market is well placed to capture investor flows if markets remain buoyant,” says Corbett.

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