More investors taking on smart beta ETFs
Research from VanEck reveals that investors are increasing their allocation towards smart beta ETFs, as opposed to market capitalisation and active strategies.
Smart beta cumulative net flows as a percentage of total flows has grown from 11.7 per cent to 21.7 per cent between 2016 and 2018, according to VanEck’s ETF IQ Scorecard for December 2018.
“By strategy, smart beta ETFs are gaining in popularity, now accounting for about one-quarter of all inflows at $1.6 billion over the year to date, as investors seek targeted investment outcomes and wealth-building strategies not offered by traditional ETFs, which track market capitalisation indices,” VanEck said.
Meanwhile, net flow allocation to active exchange-traded products has remained stable at about 10 per cent of total flows.
VanEck also found that international equity ETPs attracted the greatest net inflows in 2018 at $3.2 billion, compared with $1.7 billion for Australian equities.
“This reflects the trend for Australian investors to move offshore to diversify their portfolio and pursue growth opportunities,” VanEck said.
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