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Australian ETF industry tops AUD11 billion

Tue, 13/05/2014 - 10:00

Australian exchange-traded fund investors are favouring defensive cash and yield-oriented funds, with approximately AUD135 million flowing into these products in April, according to BetaShares’ latest ETF Review.

Another record month saw the Australian exchange-traded product (ETP) market break through the AUD11 billion barrier in funds under management at the end of April.
The market grew by 4.3 per cent in the month, and has now grown approximately 50 per cent over the last 12 months.
Total monthly market growth amounted to AUD452 million with approximately AUD300 million of growth coming from new money inflows.
Highlighting investor appetite for yield, Australian high yield equities products were the most popular product category by inflows during April, while the top individual product for net inflows was the Cash ETF.
“Exchange-traded products in Australia are increasingly becoming mainstream, with assets under management expanding rapidly. Growth is being driven by an increase in confidence around global markets as well as familiarity by investors with exchange traded funds. Growth continues to be strongest in domestic and international equities, high yield and cash oriented products,” says Alex Vynokur, managing director of BetaShares.
Net outflows were virtually non-existent in April, with small outflows recorded in gold exposures.
“ETPs make it easy for investors to access a range of targeted exposures, and to implement portfolios strategies consistent with their views on the market. April’s outflows were minimal suggesting a bullish sentiment towards exposures across most asset classes,” says Vynokur.
In terms of performance, two of the top five products for the month were commodities based while A-REITs also rallied.
“Commodities-based exposures have consistently been amongst the best performing asset class each month this year to date, despite trading activity in these funds being low. This suggests investors are missing out on potential opportunities available from the commodities asset class,” he adds.

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