ETFs continue to motor along

The number of new exchange traded fund (ETF) products has increased at more than three times the rate of the past two years as the sector continues to attract record levels of new inflows.

According to the BetaShare Australian ETF Half Year Review 38 new products have been launched in 2015 alone compared with 12 products in 2014 and 11 products in 2013.

At the same time $2.9 billion of net new money was tipped into ETFs from investors who are currently favouring international equities, which attracted $1.2 billion over the half year to end of June 2015.

While market capitalisation has been building steadily over the past few years it grew by $3.4 billion or 23 per cent for the first six months of 2015 and by $6.7 billion for the past year, representing a 57 per cent increase to reach a record high of $18.4 billion at the end of the 2014/15 financial year.

BetaShares, managing director, Alex Vynokur stated that at the end of 2014 it was predicted the ETF sector was likely to reach $21 billion in funds under management by the end of 2015 and at this stage of the year it was more than likely that figure would be reached.

VIEW ALL

View all

"We continue to expect a significant number of new products to join the market in the second half of the year, in what will almost certainly be a record year of new product launches," Vynokur said.

"ETFs are increasingly gaining momentum with mainstream retail investors, as the larger adviser groups start to include them as part of their product lists, and the range of exposures available through ETFs expand into new areas like smart beta, international equities, currencies and commodities."