The State Street Global Advisor (SSgA) global ETF snapshot reports Australian investors favoured defensive investments in March, with Australian equities largely out of favour as concerns over local growth prospects surfaced.
The report stated the Australian ETF industry reached another high at the end of March, with total AUM reaching $10.7 billion and inflows for the month at a solid $265 million.
Australian ETF flows were directed towards fixed income and cash investments, in contrast to global ETF investors who sought opportunities in value based-equities over defensives.
Interest in international equity-based ETFs did not waiver among local ETF investors, however, with the category receiving the strongest inflows from Australian investors during the month.
Head of SPDR ETFs Amanda Skelly said there were several reasons for the trend towards international investing, including SMSF investor concern over exposure to financials and materials which represent more than half of the Australian market.
Skelly noted the broader adoption of ETFs by Australian-based investors – particularly within the adviser space – who were seeking broader diversification across their portfolio with low correlations to the local market. This was an underlying factor contributing to the trend towards international equity ETFs.
