Investors seeking safe havens in ETFs
Investors are still seeking safe havens amid market volatility, with the Australian ETF market attracting $4.3 billion in new cash flows in the quarter of 2019, the highest quarterly cash flows ever recorded, according to Vanguard.
The overall ETF industry saw its assets under management (AUM) grow to $455.9 billion at the end of Q3 which translated into a 32% year-on-year growth.
Vanguard saw 33% of new cash flows in September, with $158m being allocated to the Vanguard Australian Shares Index ETF (VAS), alongside Vanguard All-World ex-US Shares Index ETF (VEU), and Vanguard U.S. Total Market Shares Index ETF (VTS).
According to head of Vanguard’s equity index group in Asia-Pacific, Duncan Burns, such a result demonstrated a high demand for ETFs from a variety of investors, with no sign of momentum slowing, he said.
“Australian investors have become more focused on diversifying their portfolios, lowering their investment costs and using investment products that are true to label. It’s gratifying to see more and more investors understanding the benefits of ETFs and the low-cost diversification ETFs can offer their investment portfolios,” he said.
Burns also reminded that investors’ portfolios should reflect their tolerance for risk in a variety of market conditions.
“Keeping a long-term perspective is critical and if investors are looking for a way to safe guard their portfolio, one of the best ways is through maintaining maximum diversification across asset classes,” he added.
“Market timing is extremely difficult to execute well, even for professional active money managers. Regardless of what's happening with interest rates and the broader economy, fixed income investments should continue to play an integral role in diversified portfolios”.
AUTHOR
Oksana Patron
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
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.
