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Search for high-yields boosts ETP market

Rachael Micallef  |  19 Dec 2012Text size  Decrease  Increase  |  

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Rachael Micallef is a journalist with InvestorDaily, a Sterling publication.


The Australian Exchange Traded Product (ETP) market reached a record high for the second month in a row, following increased demand for safe, high-yielding investments.

According to BetaShares' Australian ETF (Exchange Traded Fund) Review for November, the ETP market reached $6.3 billion in assets under management (AUM) after month-on-month growth of three per cent and $73 million of net inflows.

"What we've seen from investors this month is demand for safer and high-yielding investments suggesting they were more cautious about their allocation decisions in November," BetaShares' head of investment strategy Drew Corbett said.

"As markets remain volatile and interest rates continue to fall, we expect investors to chase yields through exchang-traded products into 2013."

The best performing exchange-traded funds (ETFs) for November were palladium and non-precious metals, following the market trend for defensive allocations.
Listed property ETFs, followed by financial sector ETFs, continued as the top performers for the year to date.

October's review saw the ETP market reach the previous industry record of $6.1 billion in AUM after a month's cap growth of $360 million. New unit growth was 6.3 per cent for the month, with trading volumes increasing by almost 60 per cent in October, indicating greater investor confidence.

The November result shows that the ETP market has continued this trend despite challenging economic conditions.

"It has been a tough year for the funds management industry but we are seeing exchange traded products continue to gain momentum with investors with growth in assets under management of 23 per cent over the last 12 months," Corbett said.