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.
AUTHOR
Nicholas O'Donoghue
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
