ETF market doubles in size in three years
The Australian exchange traded funds (ETF) sector has recorded strong growth for the past three years, almost doubling in size since 2011 and nearly reaching $10 billion in assets under management (AUM).
Currently the ETF sector has 90 funds with $9.4 billion in AUM, up from $6.5 billion in 2012 and from $4.9 billion and 50 funds in 2011.
This growth has been fuelled by adviser and self-managed superannuation fund demand as well as the search for dividend yield, according to SPDR ETFs Australia head Amanda Skelly.
“Year-to-date growth in the Australian ETF market has surpassed 40 per cent, fuelled by financial adviser and continued SMSF investor adoption and their preference for on-exchange access to market opportunities,” Skelly said.
“High yield investing has been a favourite for Australian investors for quite some time and we are now seeing a rapid increase in interest from global investors, with AUM to high yield equity ETFs surpassing $100 billion this month.”
The growth in the Australian ETF sector follows a slow September with October posting near record inflows of more than $270 million, according to Australian Stock Exchange data.
Local market returns were 4 per cent for October, with ETF investors preferring domestic investment strategies which focused on high yield. However some ETF investments have gone to Europe as a result of central bank policies, indicating future growth. The S&P Europe 350 Index delivered 3 per cent for the month and S&P 500 returned 3.3 per cent.
According to SPDR the gap between equities and commodities continued to grow, with local and overseas investors becoming net sellers of commodity-based ETFs. Australian ETF investors also looked to benefit from currency-based ETFs after the Australian dollar reached US$0.97 in mid-October.
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
