$A decline sparks ETF flows
The decline in the value of the Australian dollar has prompted interest from Australian dollars into US dollar exchange traded funds (ETFs), according to ETF specialist, BetaShares.
In an analysis issued early this week, BetaShares said it had seen approximately $30 million of net inflows into the BetaShares US Dollar ETF (ASX code “USD”) since the start of September.
The fund is designed to provide exposure to the performance of the US dollar relative to the Australian dollar, meaning the value of the fund will go up as the US dollar appreciates, and vice versa. The fund now has over $200 million in assets under management.
Commenting on the inflows, BetaShares’ managing director, Alex Vynokur, said it was indicative of the fact that many investors expected the Australian dollar to continue its recent decline.
“We are currently seeing a sharp increase in the level of interest in the USD ETF, both in terms of
incoming enquiries and net inflows, which seems to reveal an undercurrent of pessimism regarding the Australian dollar,” he said.
“As the ETF landscape continues to mature in Australia, there has been significant growth in the number of investors using exchange traded funds to execute tactical positions across asset classes,” Vynokur said.
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