Global ETF industry hits record high

The global ETF industry hit a new record high in the third quarter with assets in US passive managed funds and index ETFs topping those in US active managed funds for the first time, according to BetaShares.

Global ETF's finished the quarter with US$5.8 trillion in assets under management reflecting growth of 20% in the year to date.

The report found ETFs captured 75% of flows in the US investment management industry in the quarter with passive ETFs showing particular strength, taking in around US$73 billion.

As a result of this continued preference by investors, assets in US passive managed funds and index ETFs topped those in US actively managed funds for the first time in August.

BetaShares chief executive Alex Vynokur said: "What is particularly striking in the data is the continued investor preference towards ETFs, both active and passive, with ETFs outselling mutual funds three-to-one in the September quarter."

BetaShares said continuing the trend from previous quarters; the fixed income asset class received the highest inflows, with 45% of total inflows, however significantly less than the 61% seen in the previous quarter.

Equity ETFs maintained around 38% share of inflows, while the largest changed in terms of investor preference was commodities, whose share of inflows rose from 0.3% to around 10%.

"Most of the demand in commodities was for gold and silver, with investors seeing out safe havens due to increased geopolitical risk," BetaShares said.

Vynokur said investors are still showing signs of concern over the ongoing US-China trade dispute.

"Defensive exposures are continuing to attract investor funds, reflecting concerns about the US-China trade conflict, and caution around equity market valuations," Vynokur said.

"The marked change from last quarter, however, was the more diversified approach taken, with investors allocating significant funds to precious metals alongside fixed income."

Read more: BetaSharesGlobal ETFAlex VynokurEquity ETFs
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