The exchange-traded fund (ETF) industry has reached an all-time end-of-month high, breaking through the $70 billion barrier for the first time, an industry report has revealed.
According to the “BetaShares Australian ETF Review – August 2020”, the ETF sector closed the month of August at $70.7 billion.
“The Australian ETF industry has extended its strong growth run, exceeding the $70 billion milestone for the first time,” BetaShares said.
In addition, funds under management grew by 5.3 per cent or $3.6 billion in August, which was the third largest monthly increase on record.
“Industry growth over the last 12 months has been 31 per cent, representing absolute growth of $16.6 billion over this period,” the fund manager said.
“With both the local and Australian share markets rising over the month of August, industry growth came approximately 50 per cent from market movements, 50 per cent from net new money, which totalled $1.7 billion.”
It also found trading value had remained stable month on month, with a total value of $6.5 billion traded on the Australian Securities Exchange.
“Flows were robust across a number of asset class categories this month, with international equities exposures dominating ($722 million net flows),” it said.
“Investors, however, continued to diversify their portfolios away from equities with approximately $370 million into fixed income products and approximately $200 million into both cash and commodities ETFs (largely gold products).
“Outflows were limited to US dollar products even as the US dollar fell in value versus the Australian dollar (AUD), with investors apparently concerned that continued AUD strength is possible.”
Last month, BetaShares revealed the ETF sector had regained its pre-COVID-19 performance, beating its previous all-time end-of-month high by $1.2 billion in July.
In May, the “Q2 ETF Landscape Report” from ETF Securities found ETFs were performing at “all-time highs” despite the market turmoil caused by the COVID-19 pandemic.
