ETP inflows soar during COVID-19

VanEck/Arian-Neiron/ETFs/Gold/flows/

15 May 2020
| By Chris Dastoor |
image
image
expand image

The Australian exchange traded product (ETP) industry experienced inflows of over $1.07 billion in April, with half that investment directed at Australian equities, according to VanEck.

April flows to Australian equity ETPs totalled $612.6 million while the S&P/ASX 200 Index rallied 8.78%, which followed $1.03 billion domestic inflows in March.

Over the 12 months to 30 April, assets under management (AUM) in the Australian ETP market rose 28% to $61.06 billion.

Arian Neiron, VanEck managing director and head of Asia Pacific, said the recent market correction opened up opportunities for investors to buy exchange traded funds (ETFs) at lower prices.

“The healthy inflows illustrate the appeal of ETFs in enabling investors to achieve strategic asset allocations, especially through smart beta ETFs, which have attracted almost one-fifth of ETP inflows this year, or $830.6 million,” Neiron said.

“Australian equities too are very popular, attracting $2.42 billion in net flows over the year to 30 April, or around half of all ETP flows.

“Australian equities have been oversold and local investors and even US hedge funds are looking at oversold assets in this region.”

Investors looked to gold due to market volatility and gold prices had strong gains in April, while flows for commodity ETPs totalled $211.1 million.

The Australian dollar’s volatility also pushed investors into currency hedged ETFs, but unhedged funds remained popular too.

“As we saw in March, when markets correct, the falling Australian dollar lifts returns from unhedged international investments, providing a downside buffer,” Neiron said.

“Now that Australian dollar has recovered a little, we are also seeing greater flows into hedged international equity ETFs.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 5 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND