Where ETF investors are putting their money in 2021: Charts of the week
We take a visual look at asset flows into the ETF sector.
Mentioned: Magellan Global (Open Class) (MGOC), BetaShares Global Sstnbty Ldrs ETF (ETHI), iShares Core S&P/ASX 200 ETF (IOZ), BetaShares NASDAQ 100 ETF (NDQ)
Banned from travel, ETF investors are sending their money overseas instead. In 2021, flows into international equities continue while enthusiasm for the domestic market fades and investors flee cash altogether.
In today’s Charts of the Week, we recap asset flows for the exchange traded funds (ETF) sector for the first six months of 2021.
ETF investors pile into global stocks
International equities remain the destination of choice for Australian investors. International ETFs received three times as many flows as domestic funds.
International markets have had a roaring year, and even Japan’s long-troubled Nikkei 225 returned 31.3 per cent.
Interest in Australian funds slowed in 2021. Domestic ETFs received less than half the $3.21 billion recorded in the last six months of 2020.
Equities had six times as many flows as fixed interest.
Investors pulled out of cash ETFs, adding to the category’s woes. In June, cash ETFs experienced the second-highest withdrawal on record, as $227.1 million went for the exit.
Investors ditch Magellan and embrace sustainability
BetaShares Global Sustainability Leaders (ASX: ETHI) had the fourth highest quantity of flows for 2021. It’s ridden the wave of popularity for sustainable investing along with ESG-friendly funds.
ETHI beat out funds such as behemoth iShares Core S&P/ASX 200 ETF (ASX: IOZ), Australia’s third largest domestic ETF. IOZ has been plagued by withdrawals this year, losing about $780 million since May.
Investor-favourite Magellan had the most outflows as investors pulled $323 million from the listed fund. After a difficult twelve months, the Global Fund (Open Class) (ASX: MGOC) is now underperforming its benchmark on a 5-year annualised basis.
Vanguard continues to dominate
Vanguard was the most popular ETF provider in the market. The issuer had more than six times the flows of its global competitor BlackRock’s iShares. BetaShares was in second place driven by the popularity of ETHI and its Nasdaq 100 fund (ASX: NDQ).
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