With global exchange traded fund (ETF) and exchange traded product (ETP) business reaching record highs on the back of increasing institutional investment, Australian institutions are also increasing their take-up.
Independent research and consultancy firm ETFGI has released new research which found net inflows of $73.4 billion in the first quarter of 2013 had pushed assets in global ETFs to an all-time high of $2.09 trillion.
This was largely the result of an increasing take-up of products by institutional investors, ETFGI found.
State Street Australian head of SPDR ETFs Amanda Skelly told InvestorDaily that a similar take-up of ETF products is being seen in domestic institutions.
"I can unequivocally say that we've definitely seen a similar increase in the adoption of ETFs over the last couple of years by institutions here in Australia," Ms Skelly said.
"I think the unique thing here is that the growth occurring is not in using the local ETFs. More often than not they're going offshore because there is a much broader range of products available - so that's where we're seeing most of the growth happening."
In March, ETFGI found that global ETFs and ETPs recorded $23.9 billion in net inflows, with 4,778 ETFs and ETPs available.
Ms Skelly said that this increasing product range will continue to ensure strong inflows into ETFs from the institutional sector.
"Generally, institutions look for the niche strategies," Ms Skelly said.
"I think one factor that is encouraging that growth is increasing competition. It provides more product selection and it means it's getting cheaper and cheaper to trade those ETFs, which is always good for an institution."
