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Australian ETFs to see biggest inflows

26 October 2017 By Oksana Patron


The Australian exchange traded fund (ETF) industry has attracted $5.7 billion of new cash flows and is expected to see its biggest ever full year of inflows, according to Vanguard.

Year-to-date global equity ETFs attracted the biggest proportion of ETF investment, which accounted for 40 per cent of total inflows, as investors chased the strong returns from the asset classes and looked to “reduce their home country bias to Australian equities”.

At the same time, emerging markets climbed 5.3 per cent, while a rise of around two per cent in the Australian dollar against the US dollar helped hedged international equities return 4.3 per cent.

According to Vanguard, the Australian ETF industry grew to just under $32 billion, with the top four issuers (iShares, Vanguard, StateStreet and BetaShares) accounting for around 87 per cent of total industry funds under management (FUM).

Vanguard also said that its ETF FUM grew 36 per cent in 2017 to just under $9 billion, from $6.6 billion at the end of 2016.

“All Vanguard Australia’s equity ETF products finished the quarter with positive returns, while the bond ETFs VAF and VGB were the only products in the red,” the company said.

The company also announced the launch of its new ETF – Vanguard Global Aggregate Fixed Interest Index (Hedged) (VBND) aimed at providing investors with low-cost, high-quality and diversified exposure to global fixed income investment.

Vanguard’s ETF products also recorded their best ever quarter in Q3 2017, receiving $1.2 billion in new cash flows, the company said. 

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