The Australian ETF industry reached yet another high at the end of March, with total assets under management (AUM) reaching $10.7 billion and cash flows for the month totalling $265 million.
According to SSgA, this was approximately 40 per cent more than that received in the first three months of 2013, with no signs of it slowing for the remainder of the year.
Speaking to InvestorDaily, SSgA head of SPDR ETFs Amanda Skelly said over the past year to 18 months it has been “all about” equity ETFs.
“Bonds and cash have generally been lower down the ladder of where investors wanted to place their money. That changed in March; for the first time in quite a number of months we actually saw quite strong cash flows by Australian investors into fixed income ETFs in addition to cash,” she said.
Ms Skelly said it has taken some time for people to understand how to use fixed income ETFs in a portfolio.
“I am really encouraged that we have seen these positive flows for March because it is a signal that maybe people are starting to value the role of fixed income ETFs,” she said.
“Yes, it is about the income that bonds can provide but it’s also about the diversification they provide to equities in a portfolio,” she added.
Ms Skelly said international equities continue to remain very strong, with investors still looking to go offshore.
“My view is that it’s pretty symptomatic of the fact Australian investors are generally underexposed to overseas markets, so they are still looking to gradually increase that part of their portfolio,” she said.
