What the ETF? Aussie Industry FuM end May at record high of $147.4 billion as tech leads way
The strongest inflows recorded in the year to date saw the Aussie ETF industry reach fresh record highs in May, even though actual asset class performance was very mixed.
Funds under management (FuM) grew by 1% month-on-month, for a total monthly market cap increase of $1.4 billion. Industry FuM ended the month at $147.4bn, a new record high, according to the latest Betashares monthly Australian ETF industry report.
For the first time in CY23, investor inflows exceeded $1bn, with $1.1bn of net inflows recorded, representing 80% of the month’s growth.
ASX ETF trading value also rebounded strongly in May after a quiet April, growing 41% month-on-month for a total of $9.2bn – the highest level in six months.
Over the past 12 months the industry has grown by 12.3% year-on-year, or $16.1bn.
Despite the volatility in markets during May, there were 10 new products launched including active ETFs from JP Morgan and new-to-industry manager Aoris.
Van Eck launched a treasury bond ETF, while iShares launched global property and global infrastructure products.
Betashares also launched two global shares products. There are now 339 exchange traded products trading on the ASX and CBOE.
May was a tough month for global share markets, including the ASX, as macroeconomic factors and the US debt ceiling crisis had investors jittery.
However, tech did well across the board as investors remained enthusiastic about the emerging field of artificial intelligence (AI) and related companies.
According to the BetaShares report the best performing products for May were all tech themed. On the flip side, Australian equities had negative performance in general as the Reserve Bank of Australia (RBA) continued to hike interest rates in response to sticky inflation.
BetaShares said, in what has been very much a reoccurring theme in CY23, Australian fixed income exposures led the way in terms of flows for May with the category recording the highest level of net flows during the month of $480 million.
Broad Australian equities products also continued to receive flows, as has been the case for the year more broadly.
In terms of category outflows, there continued to be outflows in global equities exposures, albeit small, totalling $7 million.
BetaShares said global equities products have typically been the most popular category in Australian ETFs but have now received net outflows for three consecutive months as investors preference Australian over global share exposures, presumably due to continued concern over likely recessions in a number of key markets, including the US.