Australian ETF market to reach $55bn by year’s end, says BetaShares

The Australian ETF market reached new highs in February following the largest increase of its market cap on record, according to the latest report from Sydney-based BetaShares. Increasing AU$2.3bn for the month, the Australian Stock Exchange (ASX) ETF market cap grew 5.4% to $44.8bn.

Despite no new listings for four weeks, the ASX still trades 242 ETPs. BetaShares says as asset prices rose in February, so did market sentiment, contributing to a 24% increase in trading value by ETF investors.

As the equity market bounced back in February, Australian investors flocked to international equities which saw inflows in excess of $210m, primarily in developed markets ($135m). Second to overseas equity ETFs was fixed income with $150m. Despite Palladium ETCs being the second-best performing product in February, investors sold off commodity ETFs as the category saw total outflows of $3.3m. Gold ETPs alone saw outflows of $3.6m which is to be expected as equity performances improve.

BetaShares predicts this momentum in ETFs to continue in Australia and forecasts funds under management to be in the range of $50-55bn by the end of 2019.

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