Fixed income ETFs capture over $900m in October flows
Fixed income ETFs have garnered more than $900 million in inflows in October, trailing only behind international equities ($1.2 billion) to mark another solid month, according to Betashares.
The fund manager’s latest monthly ETF review found the Australian ETF industry witnessed $3.2 billion in flows over the month, the second all-time highest level for monthly flows on record.
Notably, fixed income funds comprised three of the top 10 funds in terms of flows.
Vanguard’s Global Aggregate Bond Index (Hedged) ETF (ASX: VBND) stood in second place with $223 million in flows, while BlackRock’s iShares Core Composite ETF (ASX: IAF) came in sixth at $116 million in flows.
Meanwhile, VanEck’s Australian Subordinated Debt ETF (ASX: SUBD) took the ninth spot with almost $90 million in flows.
This “strong month” for fixed income, as observed by Betashares, follows a slight dip the month prior, which saw cash and fixed income flows dip from $808 million in August to $551 million in September. However, the asset class has since rebounded to notch $976 million in ETF flows in October.
Looking more closely at category inflows, Betashares also highlighted Australian bond ETFs took the lion’s share last month at $691 million, outpacing the $279 million added to global bond ETFs.
Earlier this month, the fund manager launched its latest fixed income offering, the Betashares Ethical Australian Composite Bond ETF (ASX: AEBD), which provides exposure to a diversified portfolio of high-quality Australian corporate and government bonds.
Money Management previously explored the benefits of fixed income exposures in client portfolios, with Andrew Yap, head of multi-asset and Australian fixed income at Zenith Investment Partners, pointing out how it delivers stability for clients.
“For many investors, fixed income is seen as a defensive asset class, one that provides exposure to securities that have capital preservation qualities and an income stream at a premium to cash,” he explained.
“These characteristics are deemed to be particularly pertinent in times of extreme market volatility.”
AUTHOR
Rhea Nath
Recommended for you
With nearly one-third of financial advisers utilising Australian Ethical’s investment options, expanding its advised channels remains a key focus for the firm.
The global investment manager is understood to be seeking a larger footprint in alternatives as it eyes taking a potential stake in a private credit manager.
Selfwealth has announced it has received a “highly attractive” bid from Bell Financial Group to acquire 100 per cent of the company, valuing the company at $51 million.
The fund manager has voiced optimism regarding the 60/40 allocation, noting the strategy can be a wise choice for clients in the long term.
