February Australian ETF Review: Industry’s first $1 billion month

For the first time in its history, the Australian exchange traded fund industry increased in size by $1 billion in a single month, reaching a new record high of $16.8 billion in funds under management (FUM), according to the BetaShares Australian ETF Review – February 2015.

The overall appreciation in the value of Australian and global equities was a key contributor to the growth, with positive market movements contributing to 75 per cent of this month’s growth. New money flows for the month were $280 million.

BetaShares Managing Director Alex Vynokur said: “The exchange traded fund market in Australia is going from strength to strength, illustrated by the record growth of $1 billion in February. This brings the total growth in only the first two months of this year to just under $2 billion.

“In terms of product sectors, exposures to global developed market equities received the strongest inflows throughout the month, with a mix of both US and global equities products receiving strong flows.

“Compared to other months, redemption activity was relatively high, possibly as a result of investors taking profits after a strong run in the markets,” Mr Vynokur added.

Strong product development activity continued this month, with four new products launched in February, bringing the total number of products launched this year so far to seven, compared to a total of 12 new products for the whole of 2014.

“It’s pleasing to see product development in the industry progressing rapidly this year, indicating that investor demand and interest in exchange traded products continues to grow.

“With a growing array of products for investors to make use of in different market conditions, we believe the industry is on track to meet or exceed $21-23 billion FUM by the end of the year,” Mr Vynokur added.

BetaShares Geared Australian Equities Fund (hedge fund) (GEAR) recorded the best investment performance for the month, increasing ~15%.