ETP market set for merry finish

15-Nov-2017

By Megan Tran

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Australia's exchange-traded product (ETP) market was set to end the year with a projected $35 billion in assets under management as it continued its strong growth, according to asset manager VanEck.

ETP assets in October reached $33 billion, which was a 39 per cent increase from $24 billion in October last year, according to data from VanEck and the Australian Securities Exchange (ASX).

Year-to-date flows to 30 October were $6.087 billion, just short of the record $6.091 billion in 2015.

In terms of asset classes, international equity ETPs had been the most popular, with $2.66 billion in year-to-date flows, compared to $1.95 billion for Australian equity ETPs.

VanEck Australia managing director Arian Neiron said investors were using ETPs to access markets offshore and broaden their portfolios, as well as taking advantage of smart beta products, which offered targeted investment outcomes and wealth-building strategies.

“Of the 131 listed ETFs (exchange-traded funds), 41 are now smart beta, or almost one in three,” Neiron said.

“Compared to previous years, dedicated European and emerging market equity ETPs have [also] been popular, as investors chase value and performance in those markets.

“However, broad-based international ETFs are still getting the lion’s share of flows into international equity ETPs.”

He added the ETP industry was expected to grow to between $70 billion and $80 billion within five years.

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