Industry Updates

Australian ETF market breaks Q3 flow record

George Geddes

a bridge over water

The Australian ETF market pulled in $4.3bn in the third quarter of 2019, the highest quarterly cash flow ever recorded, according to the latest figures from the Australian Securities Exchange (ASX) and Vanguard.

With three months left of the year, year-to-date flows reached $8.9bn, surpassing that of 2017 which received $8.1bn for the whole year. However, Q4 tends to be the most volatile period so there is every chance the $8.9bn for 2019 could fall although Vanguard is optimistic momentum is not likely to slow.

As a whole, the Australian ETF industry has ballooned to $55.9bn, up 32% year-on-year. The last six years for the industry has been monumental for Australia, and the next six years is likely to be the same.

Domestic equity ETFs attracted the majority of inflows for the last quarter, contributing 36% of the $4.3bn. Fixed income ETFs have been the most popular global trend in 2019 and the asset class has seen inflows of $3.4bn YTD in Australia.

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Elsewhere for the year, international equity ETFs have claimed more than $2.3bn worth of assets, just behind Australian equity ETFs with $2.5bn.

At September’s end, Vanguard continued to be Australia’s largest ETF manager with $17.5bn under management. It received $1.5bn in Q3 ahead of BetaShares with $1.2bn and iShares with $510m.

Duncan Burns, head of Vanguard’s equity index group in Asia-Pacific, commented: “Australian investors have become more focused on diversifying their portfolios, lowering their investment costs and using investment products that are true to label.

“The continued interest in fixed income suggests that investors may be harbouring reservations around equity market growth and choosing to seek more defensive assets instead.”

To hear more about the state of the Australian ETF market, register now for ETF Stream's ETFs Down Under, 16 October in Sydney.

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