ETFs cross $50bn, fixed income leads

Aussie investors were keen on fixed income ETFs but cooled off on currency and commodities ETFs in the first half, as strong inflows and buoyant markets pushed the total FUM over the $50 billion mark.

ETFs attracted $4.4 billion in net inflows in the six months to June, which is a significant increase from the $2.7 billion in the first half last year.

For the first time, fixed income ETFs overtook the dominant international equities products in inflows, bringing about $1.38 billion to the latter's $1.32 billion.

Commodities ETFs recorded outflows of $12.69 million while currency ETFs bled about $55 million.

Vanguard and BetaShares commanded 60% of the net inflows. Adding BlackRock iShares, the three's market share of the net inflows was 80%.

Top performing products for the half were BetaShares geared equities products. GEAR returned 45.2% and GGUS returned 41.2%.

These were followed by two VanEck Vectors China ETFs: CNEW and CETF returned just under 30% each.

Active ETFs share of inflows weakens

Aussie investors strengthened their preference for passive and smart beta ETFs in the first half of the year.

However, investors showed a preference for passive and smart beta products over active ETFs so far in this half.

Passive ETFs attracted 82% of the net inflows, an increase from their 78% share of the net inflows for last year.

Active ETFs had a 9% share of the first half's inflows (down from 12% for 2019).

"Passive index products took in the vast majority of flows for this half year, and remains the dominant category. Its share has grown at the expense of other categories (2018 Index flows were 78% of total)," BetaShares said.

"In addition, unlike last year, we are seeing approximately equal flows between smart-beta ETFs and passive products. By contrast, 2018 saw Active ETFs take 12% of flows."

A report from Stockspot released earlier this month said ETFs are saving investors over $300 million in fees a year.

Read more: BetaSharesBlackRock iSharesStockspotVanEckVanguard
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