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Global equities ETFs surge

Australian investors are favouring global equities exchange traded funds (ETFs), with the sector recording nearly 50% growth year on year, research shows.

Industry research from Vanguard showed global equities ETFs recorded $4.9 billion in inflows in Q3 2021 and a total of $10.9 billion year to date in September.

This is in line with BetaShares' Australian ETF Review for September which recorded $963 million in global equities ETFs for the month.

The global equities ETFs with the highest monthly inflows were Vanguard MSCI Index International Shares ($115 million), Hyperion Global Growth Companies Fund ($102 million), Vanguard Diversified High Growth Index ($99 million) and BetaShares Global Sustainability Leaders ($96 million).

"With travel restrictions still in place, Australians are going overseas a little differently this year by pouring into ETFs that target exposure to international markets," Vanguard head of ETF capital markets, Asia Pacific Minh Tieu said.

"Whether it's because they're optimistic about the global economic recovery or simply wanting to diversify away from home markets, more funds are flowing into international equity ETFs this year than into Australian equity ETFs".

Over the quarter, the ETF industry experienced $9 billion in flows with $2.9 billion recorded in the month of September. The total assets under management is now $129 billion.

Vanguard is leading the year to date flows at $6.5 billion, followed by BetaShares at $4.7 billion and iShares at $1.8 billion.

Rounding out the top five are VanEck at $1.65 billion and ETF Securities at $830 million.

"If this momentum continues and we stay on the same growth trajectory as the last few years, we estimate the Australian ETF industry will reach the next $100 billion of AUM in half the time it took to reach the first $100 billion - which would be a remarkable feat," Tieu said.

Read more: VanguardBetaSharesMinh TieuETF SecuritiesiSharesVanEck