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Ethical investing tipped to drive ETF market
Following a volatile 2020 where investors poured into ETFs, shareholders are tipped to focus on ethical investing and technology as the recovery from the COVID-19 pandemic continues, an industry expert has said.
Ethical investing tipped to drive ETF market
Following a volatile 2020 where investors poured into ETFs, shareholders are tipped to focus on ethical investing and technology as the recovery from the COVID-19 pandemic continues, an industry expert has said.
Figures released by BetaShares showed that Australia’s ETF industry has now passed $100 billion in funds under management for the first time in history, with social issues likely to push its strong growth into the future.
Now standing at $102.9 billion, the industry added $8 billion in the first quarter of 2021 after a record-breaking 2020, which saw funds grow by over 50 per cent over the course of the year.
BetaShares chief executive officer Alex Vynokur highlighted that record growth in the back half of 2020 is likely to continue into 2021.
“We anticipate strong investor demand will be maintained through the rest of 2021, and predict the ETF industry will end the year with around $125 billion FUM,” Mr Vynokur said.
Mr Vynokur opined that much of the growth will come through the technology and ethical sectors, with strong consumer demand leading more ETF options for consumers.
“The increased interest in socially responsible investing coincides with widespread and growing concern around the environment and global warming,” Mr Vynokur said.
“We think this interest is likely to continue as the global economy emerges from the COVID-19 pandemic.
“As economies open up again, investors will have a chance to look for portfolios and companies whose practices align with their ethical values, including less reliance on fossil fuels, stronger corporate governance and, partly as a result of the pandemic, increasing awareness of ‘social’ (the S in ESG) factors,” the CEO continued.
Mr Vynokur opined that the Australian ETF industry has emerged from a year of uncertainty in a strong position, which will be the catalyst for a strong 2021.
“While we have recently seen some retail traders overseas caught up in speculative activity in particularly volatile stocks, investors more broadly continue to recognise the benefits of ETFs in establishing a resilient long-term portfolio,” he concluded.
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