Australian ETF industry reaches $15 billion milestone – sector grows 50% YOY

The Australian ETF industry reached $15 billion by the end of 2014, growing a massive 50% when compared to data released in January of last year. Flows in December were also the largest on record, with 672 million flowing into the category, largely driven by interest in international-based ETFs.

Despite ongoing fears about the stability of the Eurozone and the success of “Abenomics”, local investors continued to seek investment opportunities offshore. This is likely to continue throughout 2015, according to Amanda Skelly, head of SPDR ETFs, State Street Global Advisors.

“Local investors will continue to seek opportunities that tap into the diversification benefits of investing offshore this year and Tuesday’s fall in the ASX 200 put a spotlight on the current volatility in the local market.”

“Materials and energy make up a large percentage of our market and with lower commodity prices and the possibility that disappointing growth in China will negatively impact our exports, the reaction comes as no surprise – and investors are therefore seeking opportunities overseas.”

Despite the small rally in the Australian dollar off the back of better than expected trade data, understanding and managing your portfolios exposure to foreign currency will be a new element for investors to consider this year.

“Along with ETFs that offer exposure to international markets, hedged international ETFs that manage currency risk should be a key focus for investors this year.”