ETF sector grows 2 per cent

The ETF sector has witnessed a strong surge in August

14-Sep-2017

By Megan Tran

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The exchange-traded fund (ETF) sector has witnessed another strong surge, with the industry hitting $30.9 billion in funds under management in August, an increase of 2.2 per cent on the previous month.

The “BetaShares Australian ETF Review” for August found $644.1 million of net new money entered the sector over the course of the month.

BetaShares managing director Alex Vynokur said the figure showed how strongly the industry was benefiting from increased adoption from a range of investors.

“More and more financial advisers are using ETFs, with 60 per cent of financial advisers now adopting ETFs,” Vynokur said.

He added ETFs’ transparency, liquidity and low costs were all factors that attracted advisers and investors alike.

While financial planning clients had made inroads in understanding ETFs, there was always a need for more training on the benefits and risks, he said.

“At BetaShares we continually strive to further educate our adviser clients via portfolio construction case studies, informational content and more basic ETF 101 material,” he said.

He said over the next 12 months investors should expect more exchange-traded products to be launched across nearly every asset class.

“In addition, we expect more growth and development of the active ETF industry, which remains a nascent part of the industry, but with significant potential,” he said.

The most popular product category across the funds in August was global equities, which received net flows of $350 million, while Australian bond ETFs also continued to receive strong flows.

Additionally, Betashares data revealed macro instability had driven solid performance for gold exposures in August, with gold miners and resources ETFs the best performers.

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