In February Australian ETFs
shaved off more than $2 billion of value for the first time in a year, says Betashares.
According to its latest review, Betashares said the total amount of money invested in Australian ETFs fell $2 billion to $64 billion. However, the fall in value was driven entirely by the decline in financial markets, not necessarily people pulling their money out.
In fact, as a whole, Betashares said investors added $1.6 billion of net flows to ETFs.
“While many investors’ portfolios clearly have suffered from recent falls in equity prices, it is notable that ETFs have performed as expected during a very challenging period,” BetaShares CEO Alex Vynokur said.
“At various times in the past, concerns have been raised that ETFs have not been tested in rapidly falling markets. In our view, the fact that ETFs have delivered liquidity and efficiency in this ‘real life’ test of extraordinary volatility puts those doubts to rest.”
Amongst BetaShares’ best-performing ETFs in February were its short ‘hedge fund’ style ETFs, including BBOZ, BEAR and BBUS. Each of these saw a significant jump in trading activity.
“With bearish market sentiment coming to the fore, many investors are looking to protect their portfolios, or to profit from market falls,” Vynokur added.
Volatility & fear spikes
According to VanEck ETFs, fear amongst investors seems to be peaking.
“VIX is a real time volatility index, it is also known as the ‘fear index’ and is a useful gauge of investor sentiment and expected market volatility,” VanEck’s Damon Gosen wrote.
“The VIX Index has skyrocketed over the past two weeks to 75.47, its highest level since the GFC and its 4th highest ever print.”
Earlier today, the Australian Securities and Investments Commission (ASIC) stepped into markets to place halts on spikes in share trading activity amid the uncertainty. You can read more about the halts by clicking here.
If you’re wondering where to turn in this market, you’re not alone. For the latest videos on the Australian share market, including how three analysts are approaching the recent sell-off, you can tune in for the latest video from Rask Australia by clicking here.
[ls_content_block id=”18457″ para=”paragraphs”]
