ETFs set for record growth in 2015
Australia's exchange traded fund (ETF) industry is set for another record-breaking year, with funds under management (FUM) expected to reach $21 billion by the end of 2015.
ETF issuer, BetaShares, reported that the industry recorded its highest ever annual growth in FUM in 2015, increasing 50 per cent to $15 billion, in 2014, surpassing 2013's growth of $3.5 billion.
Over the course of 2014 Australian Securities Exchange (ASX) ETFs saw inflows of new inflows jump 180 per cent on 2013 figures, despite a three per cent decline in net inflows into retail managed funds.
BetaShares managing director, Alex Vynokur, said the growth was achieved despite only 12 new products being introduced to the market in 2014.
"Notwithstanding back to back years of 50 per cent plus growth, we believe the Australian ETF market will continue to grow strongly in 2015 and forecast that total funds under management at the end of 2015 will be in the range of $21-23 billion.
"We also expect that the number of product launches will be significantly higher in 2015."
Vynokur said that products providing exposure to developed international equities were the largest beneficiaries of inflow, attracting $1.4 billion, followed by Australian high yield equity products, $720 million.
"The Australian High Interest Cash ETF was also popular, recording an investment of $370 million of new money, as investors sought to balance their riskier allocations with the stability of cash," he said.
"Outflows were generally very low and largely restricted to commodities, particularly unhedged gold, as gold continued to be eschewed by investors."
AUTHOR
Nicholas O'Donoghue
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.
