Fixed income ETP’s appeal declines
The market share of fixed income exchange traded products (ETPs) declined from 30% in 2019 to just 3% in the first half of 2020 as investors favoured Australian equities instead.
Data from VanEck for the first half of 2020 to 30 June found there had been a “complete overhaul” of favoured asset classes this year.
With record outflows from February to June 2020, fixed income ETFs dropped from 30% of market share to 3%.
On the other hand, Australian equity ETPs’ market share increased from 24% to 44% and the sector saw 1.5 times the flows of the international equities. The market share of international equities declined slightly from 32% to 25%.
Market share of ETPs
Australian equities saw inflows of $3.6 billion during the six months compared to inflows of $2 million for international ones. Meanwhile, Australian fixed income only saw inflows of $202 million and international fixed income was even smaller at just $73 million.
However, overall inflows were $8.2 billion, which Van Eck said, was an increase of 300% compared to the same period in 2018 and nine product launches took place during the period.
AUTHOR
Laura Dew
Recommended for you
Lazard Asset Management has announced the launch of a new global equity fund, expanding its qualitative offering for Australian investors.
After introducing its first active ETF to the Australian market earlier this year, BlackRock is now preparing to launch its first actively managed, income-focused ETF by the end of November.
Milford Australia has welcomed two new funds to market, driven by advisers’ need for more liquid, transparent credit solutions that meet their strong appetite for fixed income solutions.
Perennial Partners has entered into a binding agreement to take a 50 per cent stake in Balmoral Investors and appoint it as the manager of Perennial's microcap strategy.
