Full steam ahead for ETF sector
Indeed, if 2016 is anything to go by, inflows into ETF products will continue to surge.
What’s very clear is that a rapidly growing band of self-managed investors are recognising the advantages of being able to readily buy into funds on the ASX that have holdings in hundreds of underlying listed companies. ETFs have become the most popular investment vehicle for getting into the sharemarket.
In a single market transaction, investors can buy one ETF security that covers a whole share index such as the S&P/ASX 200, the US’s S&P 500, Britain’s FTSE, and hundreds of others.
Moreover, there are ETFs on the market that hold parcels of stocks in companies and securities providing exposure to specific sectors such as property and infrastructure, and to asset classes such as fixed interest and cash.
The Australian ETFs market broke new ground during 2016, with strong investor demand driving a 22 per cent increase in total ETF assets to $25.7bn. A total of 40 new ETFs were launched during the year, bringing the total number of fund products on the market at year-end to 196.