The ASX-listed exchange-traded funds market shrank last year for the first time since at least 2017, ending December with $4 billion less in its collective coffers than it held at the end of 2021.
“It’s clear there was a drop-off for 2022 in terms of new money coming in monthly,” Mr Monfort said. “With each month at least being positive inflows overall, we should have seen a continued rise in [funds under management], but returns were key in driving that down.”– a theme local ETF issuers and marketers had jumped on heavily with a slew of new products brought to market in recent years.
The growing demand from traditional investment firms to list exchange-traded versions of their funds helped the market grow by 16 per cent in terms of number of listed products, with 276 ETFs trading on the ASX at December. Blair Beaton, the ASX’s group executive of listings, confirmed that average MERs are rising as active ETFs grow as a proportion of the broader market.