Demonstrating the soaring popularity of exchange-traded funds (ETFs), Australians invested a record $5.82 billion in them last month.
Betashares data shows the unprecedented inflow, combined with a positive market performance, pushed the total value of the ASX ETF industry to a fresh all-time high of $289.2 billion in funds under management (FUM).
That's an $8.7 billion, or 1%, rise for the month, incorporating the $5.82 billion invested and a $2.88 billion combined gain in value.
The July figure smashed the previous monthly record set in January by more than $1 billion.
ETFs holding international shares lead the charge
ETFs holding international equities attracted the lion's share of new money in July, receiving $2.8 billion in net inflows.
This was more than double the next most popular category, fixed income ETFs, which attracted $1.3 billion in net inflows.
ASX ETFs holding Australian shares took third place with $962 million in net inflows.
Australian investors are increasingly looking offshore for portfolio growth opportunities.
An incredible three-year run for US equities has inspired locals to look further afield than the local bourse.
Investing in global equities is made much easier for investors through the availability of ETFs traded on the ASX or CBOE exchanges.
This avoids having to trade directly on international exchanges.
At the end of July, there were 430 exchange-traded products available on the ASX and CBOE Australia.
No new funds were launched during the month.
By the way, we recently looked at whether ASX shares might outperform global equities in the new financial year. Check it out!
Why do Aussie investors love ASX ETFs?
Strong investor appetite in July reflected rising confidence in ASX ETFs as a simple, low-cost way to build a diversified portfolio.
ETFs enable investors to buy a basket of shares, usually tracking a specific index, through a single trade for one brokerage fee.
They are less volatile than individual ASX shares, and they remove the need to spend hours researching individual companies.
ASX 200 ETFs crack records on Thursday
Several ASX ETFs tracking the benchmark S&P/ASX 200 Index (ASX: XJO) hit record highs today.
This followed yet another resetting of the ASX 200 record amid news that unemployment fell in July.
The ASX 200 Index hit a fresh peak of 8,899.1 points on Thursday, up 0.82%.
The SPDR S&P/ASX 200 ETF (ASX: STW) hit a record of $80.03 today.
The iShares Core S&P/ASX 200 ETF (ASX: IOZ) reached a record $35.79 per unit.
The positive jobs data, which lifts the chances of another interest rate cut, sent the S&P/ASX 300 Index (ASX: XKO) to a record high of 8,840.1 points, too.
The market's most popular ETF, the Vanguard Australian Shares Index ETF (ASX: VAS), which tracks the ASX 300, followed suit.
The VAS ETF rose to a record $110.32 today.
The post Why investors ploughed a record $5.82 billion into ASX ETFs last month appeared first on The Motley Fool Australia.
Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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