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Fixed income and cash the winner in ETFs

16 May 2016 By Jessica Amir

Stockspot found that the fasted growing exchange traded fund (ETF) market was the fixed income and cash sector, which overtook Australian shares strategies.

The robo-advice provider, which builds ETF portfolios, compared the 128 listed ETFs in Australia, and said that fixed income and cash increased their funds under management (FUM) by 40 per cent.

It said the second fastest growing sector was global shares, which grew 35 per cent (to $665 million).

Stockspot's data was collected from the 12 months to March 2016 and published in their 'Australian ETF report 2016'.

It showed that the ETF market grew 20 per cent, from $17.8 billion to $21.3 billion, and 66 per cent from 2014-2015, while there were 28 new ETFs.

"The majority of ETFs were managed by the largest four competitors," Stockspot chief executive, Chris Brycki said.

iShares also came out as the biggest players in the field, with their FUM up four per cent (to $6,942 million), while the second biggest issuer was Vanguard, up 47 per cent in FUM to $4,973 million. Meanwhile, SPDR and BetaShares were in third and fourth places respectively.

Brycki said "we've had four or five years of massive growth in the ETF industry".

More funds were leaving active managed funds and going into passive ETFs than ever before, he said.

"About $400 billion went into passive funds (such as ETFs and unlisted index funds) and $200 billion left active funds," he added.

The best performing ETF was BetaShares' Australian Equities Bear (Hedge Fund) which grew 11 per cent, while the worst performer was BetaShares' Crude Oil Index ETF-Currency Hedged (synthetic) fund, which shed 44 per cent, Brycki said.

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