ETFs uptake surges as investors hedge against uncertainty: State Street



Australian investors are increasingly turning to exchange traded funds (ETFs) to tap into the benefits of offshore investments, with the sector surpassing $15 billion in funds under management.
State Street Global Advisors head of SPDR ETFs, Amanda Skelly, said the industry hit the milestone after a record-breaking December, when $672 million followed into the category.
She said the continued growth of the ETF industry represented 50 per cent year-on-year growth, largely driven by interest in international-based ETF, came as "no surprise" despite fears about the stability of the Eurozone, and forecast further growth in 2015.
"Local investors will continue to seek opportunities that tap into the diversification benefits of investing offshore this year and Tuesday's fall in the ASX 200 put a spotlight on the current volatility in the local market," Skelly said.
"Materials and energy make up a large percentage of our market and with lower commodity prices and the possibility that disappointing growth in China will negatively impact our exports, the reaction comes as no surprise - and investors are therefore seeking opportunities overseas."
Skelly added that ETFs could provide investors with an opportunity to manage their currency risk.
Recommended for you
Magellan has closed out the financial year with funds under management approaching $40 billion and outlined its estimated performance fees.
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.