ETF Market Insights: Unveiling the Growth and Trends of Q4 2023

February 2, 2024

Buying ETFs

The final quarter of 2023 marked a period of significant vibrancy and growth for the Exchange-Traded Fund (ETF) market, highlighting a dynamic shift in investor sentiment and market participation.

Here are 5 key highlights of the ETF market in Q4 2023.

1. Asian Equities Shine

The ETF landscape saw substantial net inflows, particularly in Asian equities, which emerged as a beacon of growth amidst a globally diverse investment backdrop. These net inflows underscored the increasing appeal of Asian markets to global investors, signaling confidence in their growth prospects.

2. Gold and Fixed Income ETFs Attract Attention

Further underlining the quarter’s trends, Gold and Fixed Income ETFs attracted heightened attention, reflecting a cautious optimism among investors navigating the uncertainties of the global economic environment. This shift towards more stable investment avenues was evident in the remarkable increase in trading interest, with Gold ETFs experiencing a 104% turnover increase and Fixed Income ETFs seeing a 52% uptick compared to the previous quarter.

3. SGX Facilitates Dynamic Growth

The Singapore Exchange (SGX) played a pivotal role in this vibrant quarter, facilitating a robust platform for ETF trading. Daily turnover for SGX-listed ETFs surged, crossing the S$13 million mark, a testament to the market’s dynamic activity and investors’ keen engagement.

4. Diverse Asset Class Performance

The quarter saw diverse interest across asset classes, with significant growth in trading turnover and AUM for equities, fixed income, REITs, and commodities.

Source: SGX

Source: SGX

5. ETF Adoption Soars as Digital Platforms and Institutional Investors Drive Growth

ETFs have become increasingly popular, nearly doubling in choice by both everyday and professional investors since 2020. Investment via online platforms is about to hit a significant milestone, showing the growing preference for managing investments digitally. Additionally, ETFs are being chosen more often for retirement savings, reflecting their importance in long-term investment strategies. This growth includes a mix of assets like stocks, property funds, bonds, and gold, demonstrating how ETFs are being used more widely to build diverse and strong investment portfolios.

Source: SGX

ETF horizons broaden 

The Q4 2023 reflects the resilience and appeal of the ETF market. As we have seen, from the robust inflows into Asian equities to the growing allure of gold and fixed-income ETFs, investors are navigating the market’s complexities with strategic acumen. The SGX’s vital role in this thriving ecosystem is clear, offering a versatile platform that supports the diverse investment needs of a global audience. The significant embrace of ETFs, amplified by digital platforms and institutional investors, reveals a forward-looking approach to portfolio diversification and financial planning. As we head into the future, these trends suggest a continued trajectory of growth and innovation within the ETF sector.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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