Australia’s ETF industry has set a record after adding $1.4 billion to its funds under management in a month, with tech-themed products leading the way.
But the news wasn’t so good for Aussie equities funds, which went backwards.
The strongest inflows recorded in the year to date boosted the Aussie ETF industry, even though actual asset class performance was very mixed.
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Funds under managemen grew by 1 per cent month-on-month, for a total monthly market cap increase of $1.4 billion.
Industry FuM ended the month at $147.4 billion, a new record high, according to the latest Betashares monthly Australian ETF industry report.
For the first time in CY23, investor inflows exceeded $1 billion, with $1.1 billion of net inflows recorded, representing 80 per cent of the month’s growth.
ASX ETF trading value also rebounded strongly in May after a quiet April, growing 41 per cent month-on-month for a total of $9.2 billion – the highest level in six months.
Over the past 12 months, the industry has grown by 12.3 per cent year-on-year, or $16.1 billion.
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Ten new products launched
Despite the volatility in markets during May, there were 10 new products launched, including active ETFs from JP Morgan and new-to-industry manager Aoris.
Van Eck launched a treasury bond ETF, while iShares launched global property and global infrastructure products.
Betashares also launched two global shares products.
There are now 339 exchange traded products trading on the ASX and CBOE.
Tech leads top performers
It was a tough May for global share markets, including the ASX, as macroeconomic factors and the US debt ceiling crisis made investors jittery.
However, tech did well across the board as investors remained enthusiastic about the emerging field of artificial intelligence (AI) and related companies.
According to the BetaShares report, the best performing products for May were all tech themed.
On the flip side, Australian equities had negative performance in general as the Reserve Bank of Australia (RBA) continued to hike interest rates in response to sticky inflation.
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Source: BetaShares
Fixed income leads inflow
BetaShares said, in what had been very much a recurring theme in CY23, Australian fixed income exposures led the way in terms of flows for May, with the category recording flows of $480 million.
Broad Australian equities products also continued to receive flows, as has been the case for the year more broadly.
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In terms of category outflows, there continued to be outflows in global equities exposures, albeit small, totalling $7 million.
BetaShares said global equities products had typically been the most popular category in Australian ETFs but had now received net outflows for three consecutive months as investors preferenced Australian share exposures, presumably due to continued concern over likely recessions in a number of key markets, including the US.
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Source: BetaShares
This content first appeared on stockhead.com.au
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