ETF Snapshot: 4 out of 10 Australian investors now have international holdings
Five new Exchange Traded Products (ETP) were released in November, all of them ‘thematic in nature including Australia’s first ever ‘crypto’ Exchange Trade Fund (ETF) – Betashares’ Crypto Innovators ETF.
Over the month of November total funds flows into Australian listed ETPs was up $1.9 billion.
Month on month Australian equity ETPs grew 1.8 per cent to $33.5 billion meaning year on year Australian Equity ETPs have increased 31.8 per cent since November 2020.
The real story in ETPs is the growth of ‘Global’ equities
In the month of November Global Equity ETPs grew 6.4 per cent to $63.4 billion meaning year on year the group has increased by 52.2 per cent since November 2020. InvestSMART saw similar growth in demand for its International Portfolio up 8.2% over the same period.
As this chart shows the growth in Australians investing in Global Equities has rapidly accelerated in the past 4 years outstripping all other asset classes.
This is an exciting trend as it shows Australians are increasing their exposure to international markets something they have not done in the past. With the recent advent of robo advisers like InvestSMART, investing apps and international funds listed on the ASX, gaining access to this asset class in much easier than its ever been before.
Breaking down the Internationals ETPs on a geographical basis and the flow of funds was out of the underperforming China and Asian funds and into the US and Europe funds. A trend that has been present for the past 2 months and is expected to continue.
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According to a recent ASX survey 4 out of every 10 Australian investors today has some form of international holdings, well up on 10 years ago when it was only 2 in 10 investors.
The same survey found 45 per cent of ‘next gen’ investors (those under 55 years) are planning to invest in ETFs over the next 12 months suggesting these trends will continue.According to a recent ASX survey 4 out of every 10 Australian investors today has some form of international holdings, well up on 10 years ago when it was only 2 in 10 investors.
Top 20 ETF’s table below.
(source InvestSMART)
Frequently Asked Questions about this Article…
Exchange Traded Products (ETPs) are investment funds traded on stock exchanges, similar to stocks. They are popular among Australian investors because they offer a convenient way to gain exposure to a wide range of asset classes, including equities, commodities, and now even cryptocurrencies, as seen with the launch of Australia's first crypto ETF.
Global Equity ETPs have experienced significant growth, increasing by 52.2% year on year as of November, compared to a 31.8% increase for Australian Equity ETPs. This indicates a strong trend of Australian investors diversifying into international markets.
More Australians are investing in international markets due to the ease of access provided by robo advisers, investing apps, and international funds listed on the ASX. This trend is also driven by the desire to diversify portfolios and seek opportunities beyond the domestic market.
The Betashares Crypto Innovators ETF is significant because it is Australia's first crypto-focused Exchange Traded Fund. It represents a new thematic investment opportunity for Australians looking to gain exposure to the growing cryptocurrency market.
There is a noticeable trend of funds flowing out of underperforming China and Asian funds and into US and European funds. This shift has been ongoing for the past two months and is expected to continue as investors seek better-performing markets.
According to a recent ASX survey, 4 out of every 10 Australian investors now have some form of international holdings. This is a significant increase from 10 years ago when only 2 in 10 investors had international exposure.
The ASX survey found that 45% of 'next gen' investors, those under 55 years old, are planning to invest in ETFs over the next 12 months. This suggests a continued interest in diversified and accessible investment options among younger investors.
InvestSMART's International Portfolio saw an 8.2% increase in demand over the same period that Global Equity ETPs grew by 6.4%. This reflects the growing interest among Australian investors in international investment opportunities.
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