Bell Potter: Watch Out For Widening Spreads, February ETF Flows & Performance

By William Gormly | More Articles by William Gormly

The ASX ETF market cap decreased by $2.1bn in February, down to $63.6bn. The reduction was due to decreasing assets prices as the sector still experienced net inflows of $1.5bn. Each of the 6 ETF categories experiences net inflows and were led by Global Equity and Domestic Fixed Interest with $514m and $391m, respectively.

Increased volatility in the market has coincided with increased trading volumes as investors seek to again access to market or sector exposure for either an opportunistic tactical exposure or to hedge against uncertainty. Higher volatility in the underlying portfolio will lead to greater fluctuations in the price of the ETF and widen spreads at times. In order to get a price closer to the NAV we suggest investors follow the below:

  • Consider using limit orders as opposed to at market orders.
  • Refrain from trading in the 30min of market open and close. This is when volatility is highest.
  • If placing a large order (>20% average daily volume), call the relevant ETF provider’s capital markets desk to assist in the facilitation of the trade.

For full details refer to the detailed report below or click here to download your copy.

William Gormly

About William Gormly

William Gormly is an ETF/LIC Specialist at Bell Potter Securities. Will provides comprehensive coverage of the ETF and LIC sectors, producing a range of highly regarded reports covering investment fundamentals, asset class structure and cost, and the role of managed investments in portfolios.

View more articles by William Gormly →