ETFs

Most Australian financial professionals are now using smart beta ETFs and other passive investments in their clients’ portfolios, a new VanEck survey shows, continuing a three-year trend away from active management approaches.

A BlackRock bitcoin ETF could add an extra $100 million in daily demand for the cryptocurrency, pumping up the price. If US regulators approve the product as expected, analysts expect big tailwinds for the entire crypto ecosystem.

Analysis of June trading by Selfwealth platform users with portfolios of more than $1 million showed clear patterns in how different generations prefer to invest, with Baby Boomers seeking income and quality while Millennials and Gen X-ers prefer exposure to the clean-energy transition and ETFs.

The popular debate lacks nuance. Neither is foolproof but both can play a crucial role in building portfolio resistance and balancing the risk/reward dynamic.

The end of the pandemic is leading to a “new normal” for the ETF market in Australia, with thematic funds set to steal the spotlight from vanilla ETFs as investors look to take advantage of megatrends like decarbonisation, Global X’s Blair Hannon says.

The surge in passive investment options in recent years, along with a record of underperformance by active managers, has pushed the ongoing active-versus-passive debate to the fore. Proponents of both styles agree, though, that how each approach performs in volatility will be the key question in 2023.

The market for exchange-traded products posted 5 per cent year-over-year growth in March, while listed investment companies continued to see assets under management fall, new ASX data shows. As rising interest rates and cost-of-living bite, though, the trend has begun to slow, with investors seeking safety in defensive ETFs.

ETFs have “well and truly taken over from actively managed funds” in investor preference for growth investments, advisers say – but when it comes to cash, they recommend eschewing the increasingly popular ETFs in favour of direct investments.

The announcement comes amid a major push into the domestic market for Global X, which in December signaled its intention to launch 10 new products in 2023.

Exchange-traded funds continued to attract inflows from investors in 2022, albeit at a slower pace thanks to rising interest rates and market volatility. Resources and mining-focused funds were clear standouts in a challenging year.

The US$10 trillion-plus exchange-traded funds market offers low-cost access to diversified investment opportunities, and Australian investors are capitalising, making A$10 billion in returns over the past year.

ETFs have revolutionised the investing universe for many good reasons. But ultimately ETFs are just like stocks – there are the good, the bad and the ugly.