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ETF inflows at record highs

Samantha Hodge  |  19 Feb 2013Text size  Decrease  Increase  |  

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Samantha Hodge is a journalist with InvestorDaily, a Sterling publication.


The exchange-traded fund (ETF) market achieved record-high inflows for the fourth consecutive month, according to BetaShares' Australian ETF Review for January 2013.

The industry recorded a 5.9 per cent market capitalisation growth with net inflows of approximately $110 million for the month.

The best exchange-traded products by performance for the month were platinum, followed by US and global international equities products.

"With the local market rallying approximately 5 per cent for the month, ETF investors bought both domestic and international equities products, including the US, Europe and Asia, indicating renewed investor appetite for growth-oriented products," BetaShares head of investment strategy Drew Corbett said.

In addition to the positive inflow, the month also saw ETF trading values increase 12 per cent, reflecting "the increasing levels of market conviction by investors".

The report also flagged that all ETFs in the top 10 by net flows were equities-based, a strong indicator of improved risk appetite.

"While demand for risk-based assets such as equities are on the rise, four of the top 10 exchange-traded products in terms of net inflows were yield or income-oriented, suggesting investors are dipping their toes back into the market, while keeping a fine balance between the stability of yield and capital growth," Corbett said.

"January is traditionally a quiet month for trading activity, but the volumes and interest from investors for the start of the year suggests the ETF market is well-placed to capture investor flows if markets remain buoyant."

BetaShares said the industry is well on track to reach the predicted $7 billion in assets under management (AUM) by the end of February and may also reach $9 billion by the end of 2013.