ETP industry at all-time high
Australia's exchange traded products (ETP) industry has reached a record high in August, ending the month at $23.5 billion, which reflected investors' ongoing risk aversion towards global markets, according to VanEck.
Investors were increasingly investing in smart beta and active ETPs, with almost 70 per cent or $197 million of total Australian ASX ETP assets being invested in those products, as they aimed to improve portfolio outcomes and navigate volatility in global and domestic markets.
Investors also continued to favour defensive assets in August, with gold bullion and gold miners exchange-traded funds (ETFs) attracting $65 million year-to-date and with $25 million being invested in August.
At the same time, inflows into fixed income ETPs were also high, amounting to $63 million.
However, flows into the ETP industry were modest, but August saw a strong product development with five new product launches, bringing the total number of ETP products to 145.
According to managing director at VanEck Australia, Arian Neiron, product issuers understood that Australia's ETP industry was relatively immature and they were looking more at the long-term opportunities in Australia.
"Australia's ETP market has plenty of room to grow, however given subdued investor confidence, we forecast the ETP industry will end the year at about $26 billion," he said.
"Investors are still concerned about the outlook of the current low growth and low rate global environment and the unintended consequences of central bank intervention. This is reflected in ETP flows.
"This current activity in the gold markets indicates that investors have become more proactive, buying gold as a hedge against potential market turmoil."
AUTHOR
Oksana Patron
Recommended for you
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.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
