Vanguard Australia ETF investors stayed the course in April

By Vanguard

ETFs

How ETF investors navigated ‘Vanguard weather’ in April

Vanguard is used to navigating bouts of market volatility like we saw in April.

We call these periods of uncertainty “Vanguard weather” because they underscore the importance of our four principles of investing success: setting long-term goals, staying balanced, minimising costs and staying disciplined.

And, last month, many of Vanguard Australia’s exchange-traded fund (ETF) investors took the opportunity to add to their portfolios.

Importantly, while markets were volatile in April, most Vanguard Australia investors stayed the course and didn’t panic. Instead, they kept their money in the market or added to their portfolios.

— Daniel Shrimski,

Vanguard Investments Australia Managing Director.

During April, Vanguard Australia saw $1.8 billion of net investor inflows to our ETFs, our highest month on record, according to data released by the Australian Securities Exchange (ASX).

It’s the second consecutive month of record-breaking ETF inflows for Vanguard. In March, Vanguard’s ETFs saw net inflows of $1.5 billion, the highest monthly inflow prior to April.

The ASX data showed Vanguard remained Australia’s number one provider of ETFs, with $70.5 billion in assets under management, the highest of any Australian ETF manager.

The two largest ETFs in Australia attracted large inflows in April. The Vanguard Australian Shares Index ETF (VAS), Australia’s largest ETF with $19.2 billion in assets under management at the end of April, attracted $563.6 million while the Vanguard MSCI Index International Shares ETF (VGS), with $10.5 billion in assets, received $269.4 million.

Investors also embraced currency-hedged ETFs, such as the Vanguard MSCI Index International Shares (Hedged) ETF (VGAD). VGAD attracted $399.9 million in inflows in April, $130.5 million more than VGS, which tracks the same index without currency hedging.

What did ETF investors buy in April?

Across the Australian ETF industry, assets under management grew by $8.8 billion in April to $250.9 billion, a new high.

International equity ETFs were the most popular in April, attracting $1.9 billion of net inflows – 42% of the total for the month.
Australian equity ETFs attracted $1.7 billion of net inflows, 38% of the month’s total.
Australian fixed interest ETFs brought in $207 million in April, 5% of the total for the month.
Infrastructure ETFs attracted $139 million of net inflows in April.
International fixed interest ETFs attracted $129 million.
Diversified ETFs brought in $125 million in April. The Vanguard Diversified High Growth Index ETF (VDHG) was the most popular, with $47 million of inflows.
Cash ETFs saw outflows of $5.1 million in April.

How strategic asset allocation can help you navigate choppy markets

At Vanguard, we believe in taking a long-term approach to investing and not overreacting to the latest market and economic headlines.

One tactic that can help you manage your portfolio in times of turbulence is what’s known as strategic asset allocation

It involves setting target allocations across various asset classes, such as domestic and international shares and fixed income, and rebalancing regularly to ensure that your portfolio stays aligned with your target allocation throughout the market’s ups and downs.

Vanguard’s research has consistently shown that the mix of assets in broadly diversified portfolios as a result of strategic asset allocation is by far the greatest determinant of both total returns and return variability over the long term.

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