International equities continue to drive Australian ETF growth

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Total asset gathering for iShares Australia in 2015 was $1.228 billion at 30 September 2015.

Funds inflows for the month accelerated from August’s $84 million to $159 million in September, reflecting the ETF flows experience in the global markets.

European equities exposures continue to dominate iShares Australia asset gathering during 2015 (IEU: $265 million), followed by global healthcare (IXJ: $163 million) and emerging markets (IEM: $111 million).

Other strong performers year to date have been global mega caps (IOO: $109 million) and Australian bonds (IAF: $92 million).

For the month of September, however, it was emerging markets exposures (IEM: $52 million), followed closely by Australian bond exposures (IAF: $49 million) that dominated iShares asset gathering, representing close to two thirds of total inflows for the month.

The iShares Australia emerging markets inflows bucked the global trend which saw emerging markets equity funds globally shed $US3.2 billion. Inflows to China equities (IZZ) were positive for the first time in four months at $740,000.

iShares flagship Australian equities fund (IOZ) inflows remained strong in September, gathering $9.7 million during the month and $74 million in the calendar YTD to 30 September.

Outflows in US equities large caps (IVV) slowed, reducing from $10 million in August to $4.6 million in September, but some strong inflows earlier in the year and during July saw positive year to date flows of $81 million. Year to date US small caps (IRU) recorded a slight inflow in September bringing year to date inflows to $10 million.

Global ETF flows surge driven by fixed income

During September a further US28.4 billion flowed to ETFs globally, driven by the best fixed income flows since February as investors weighed the Fed’s decision to leave rates unchanged

Fixed Income drew in US$11.6bn, with almost half of all flows in short maturity products which are less-impacted by rising rates, fueled by Treasuries and a rebound in investment grade corporate bonds.

U.S. equities brought in $11.2bn across large and small caps, concentrated in the period before the Fed announcement and trailing off in the second half of the month amid increased policy uncertainty.

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