BetaShares March 2018 Australian ETF Review: Sharemarket declines end 13-month growth run

From

Alex Vynokur

ETFs continued to attract net inflows in March, but weaker Australian and global equity markets pushed overall funds under management (FUM) below February’s peak, according to theBetaShares Australian ETF Review – March 2018.

March saw the continuation of positive net inflows into the industry with $481m of net flows. However, declining equity markets performance pushed total industry FUM 0.8% lower (-$288 million) – ending a 13-month run of positive growth.

As with the previous two months of 2018, International Equities continued to be the largest category for inflows, which accounted for just under $200m, followed by Australian Equities, attracting $180m in net inflows.

Commenting on the dip, BetaShares’ Chief Executive, Alex Vynokur, said: “We have seen a solid 13 months of uninterrupted growth in the industry, but coming into the second month of the year, global equity markets fell significantly, and despite the continued positive flows, the industry slowed in line with the fall in markets. Notably, this was not caused by a lack of net buying by investors but rather market forces.”

Short exposures perform

The market declines allowed products providing short exposure to perform strongly, with BetaShares Australian Equities Strong Bear Hedge Fund (BBOZ) and BetaShares US Equities Strong Bear Hedge Fund (BBUS), the top two performers for March.

“Similar to last month, we saw many investors using exchange traded products to not only take long positions during the global share-market sell-off, but also to hedge portfolios using short products,” said Mr Vynokur.

“The benefit of exchange traded products which allow people to profit from, or protect against market declines, has been vividly illustrated over the last 2 months, with trading continuing to be strong in this category.”

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