Vanguard leads Australian ETF sales during 2020 as investors flock to investment manager

From

Frank Kolimago

Vanguard Australia was the largest seller of Exchange Traded Funds (ETFs) in the first half of 2020 following the release of sales for the June 2020 quarter. The $4.3 billion in new flows during the June quarter was the largest overall quarterly increase in sales on record.

For the 2020 year to date Vanguard Australia has recorded inflows of $2.66 billion, representing 32 per cent of the total industry inflows of $8.2 billion. Sales of the Vanguard Australian Shares Index ETF (ASX:VAS) attracted an unprecedented level of investor support and accounted for more than half of Vanguard’s total ETF sales in the June quarter.

Vanguard Australia’s Managing Director Frank Kolimago said: “It is clear that Vanguard’s commitment to providing low cost access to a broad range of Exchange Traded Funds has struck an enduring chord with investors looking to grow their wealth in pursuit of their broader financial goals.

“Supporting investors to follow a long term strategy to growing their wealth was the key reason for the recent launch of the Personal Investor offer which provides investors with a package of tools to manage their investment portfolio. It also provides access to brokerage free Australian listed Vanguard ETFs, which have proven to be so extremely popular with investors.”

“Vanguard recently included access to Personal Investor for Self Managed Superannuation Funds and further enhancements are planned for the coming months to ensure we provide low-cost access to  Vanguard’s range of index and actively managed funds to the widest range of investors. Through Personal Investor, we are taking the offer to investors to grow their wealth to a new level,” he said. 

As at 30 June 2020, Vanguard Australia continues to be the largest ETF issuer with AUD$20.54 billion under management and 29 ETF products on offer.

Industry Commentary

The Australian ETF industry assets under management (AUM) sits at more than $65.5 billion.

Across the quarter, Australian equities proved to be the most popular asset class with investors, representing 45 per cent or AUD $2 billion of new cash flows to the ETF industry. This trend demonstrates Australians’ confidence in the local market, according to Minh Tieu, Head of Capital Markets for Asia-Pacific.

“This strong tilt to local shares is particularly marked given that our local market accounts for such a small percentage of the global market and may show that investors believe we’re doing better than national economies during the pandemic,” said Mr Tieu. 

“While investors are showing increased confidence in the local market, the latest bout of higher share market volatility is a timely reminder that the global diversification of their share allocations can reduce volatility as well as reduce concentration risks and expand opportunities for returns,” he said.

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