Australian ETF industry strong despite market volatility

Feb 14th, 2016 | By | Category: ETF and Index News

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BetaShares, a leading Australian provider of exchange-traded funds and a division of Horizons ETFs, has reported that the Australian ETF industry attracted $104m in net inflows in January despite global instability wiping more than $1bn off the value of locally-listed ETFs.

Australian ETF industry maintains strength despite market volatility

Despite a strong headwind, the Australian ETF industry recorded $104m in net inflows during January 2016.

The findings, published in the January release of the BetaShares Australian ETF Review, are reflective of the momentum behind the ETF structure as the preferred vehicle for beta exposure.

BetaShares Managing Director, Alex Vynokur, commented: “This year kicked off with a shaky start for global share markets. Amid this volatility, the exchange-traded fund industry continued to receive positive inflows. It is testimony to the increased depth of products now available in the Australian ETF industry that even in heavily declining markets, investors now have opportunities to protect portfolios during the turmoil.”

The most sought after product category was Australian high-yield equities, which attracted $73m in net new assets; however, other Australian equity exposures (including broad market, small cap, and large cap) also recorded net outflows.

The best performing ETFs were the BetaShares Australian Equities Strong Bear Hedge Fund (BBOZ), which aims to help investors profit from, or protect against, a declining Australian equities market by generating magnified returns that are negatively correlated to the returns of the Australian share market (as measured by the S&P/ASX 200 Index) and the BetaShares US Equities Strong Bear Hedge Fund – Currency Hedged (BBUS), which aims to help investors profit from, or protect against, a declining US equities market by generating magnified returns that are negatively correlated to the returns of the US share market (as measured by the S&P 500 Index), hedged to Australian dollars. These funds delivered returns of 12.0% and 12.87% respectively.

The most popular fund was the BetaShares Australian High Interest Cash ETF (AAA), gathering $50m over the month.

“The popularity of the BetaShares Australian High Interest Cash ETF also demonstrated how investors are looking to ETFs to find low risk solutions that still deliver regular returns in periods of market turbulence,” noted Vynokur.

In total, assets under management for Australian-listed ETFs declined by $925m over the month, to $20.4bn.

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