Australian ETFs just broke an all-time record

Aussie exchange-traded funds went absolutely gangbusters last month, breaking their own historic high set in September.

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Exchange-traded funds (ETFs) continue to soar in popularity, attracting a record amount of money from Australian investors last month.

According to Betashares, October was the second consecutive month the Australian ETF industry broke the net inflow record. It added $2.3 billion under management after grabbing $2.1 billion in September.

Those two months mark the only period in history that the monthly figure has exceeded $2 billion.

The Australian ETF industry is now worth $73.8 billion, which is also another all-time record.

Two factors made ETFs attractive in October, according to Betashares head of strategy Ilan Israelstam.

"While global equities pulled back for the second successive month, the Australian market was up by 1.9% — prompting investors to increase their exposure to domestic equities," he told The Motley Fool.

"Secondly, we saw some rotation into previously out-of-favour sectors, especially the banks, which of course make up a significant proportion of the local sharemarket. The financial sector was up around 6% over the month."

Israelstam expects more records to be broken in the coming period.

"Over the last few months there has been an increase in investor confidence, as the market rally from the lows of March have been sustained," he said.

"This has seen investors increase their exposures to equities – and Australian and international equities were the two ETF categories that saw the biggest inflows in October."

It's not all beer-and-skittles for the local industry though. Betashares itself and AMP Limited (ASX: AMP) are shutting down all three ETFs they jointly run, announcing last week that the last day of trade will be 4 December.

Who are the most popular ETF providers?

Among the ETF providers, Betashares and Vanguard are dominating. They've each attracted more than $4.3 billion of investment so far this year.

iShares is a very distant third with $2.3 billion of year-to-date inward flow.

At the other end of the league table, Platinum is not having a good year, losing $50 million out of its ETFs.

Top 5 ETF providers: most money in

ETF provider Inflow year-to-date % of Australian industry
Betashares $4.35 billion 27.8%
Vanguard $4.33 billion 27.6%
iShares $2.32 billion 14.8%
VanEck $1.66 billion 10.6%
ETF Securities $1.13 billion 7.2%
Source: Betashares. Table created by author

Bottom 5 ETF providers: most money out

ETF provider Inflow year-to-date % of Australian industry
Platinum ($50.03 million) (0.3%)
K2 Global ($5.32 million) 0.0%
Schroder ($1.76 million) 0.0%
Antipodes ($0.68 million) 0.0%
Kapstream $3.3 million 0.0%
Source: Betashares. Table created by author

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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