S&P/ASX 200 Index (ASX: XJO) shares fell 7.8% during the first month of the Iran war and the ensuing oil shock.
Rising oil and gas prices rattled investors, raising concerns about the impact on the businesses they were invested in.
We are starting to see that impact, with Qantas Airways Ltd (ASX: QAN) doubling its jet fuel cost estimates for 2H FY26 today.
Fortescue Ltd (ASX: FMG) chair Dr Andrew Forrest has also revealed they paid up to double for emergency fuel supplies last month.
With all this in mind, it’s interesting to look at how Aussie investors repositioned their ASX ETF portfolios as the conflict unfolded.
Aussies have $329 billion invested in ASX ETFs, and last month they ploughed an additional $5.6 billion into their favoured funds.
That makes March the third-highest month for net inflows ever. It seems the volatility caused by the war did not dampen their interest.
A new report from Betashares, which shows the top 10 ASX ETFs for inflows and outflows last month, reveals some interesting trends.
Let’s take a look.
Top 10 ASX ETFs for inflows last month
| ASX ETF | Amount |
| Vanguard Australian Shares Index ETF (ASX: VAS) | $895,737,926 |
| Vanguard MSCI Index International Shares ETF (ASX: VGS) | $544,375,179 |
| Vanguard All-World ex US Shares Index ETF (ASX: VEU) | $411,499,905 |
| iShares Core S&P/ASX 200 ETF (ASX: IOZ) | $324,006,912 |
| iShares U.S. Factor Rotation Active ETF (ASX: IACT) | $272,290,741 |
| Betashares Global Shares ETF (ASX: BGBL) | $254,954,620 |
| iShares S&P Europe ETF (ASX: IEU) | $250,738,482 |
| Betashares Global Shares Currency Hedged ETF (ASX: HGBL) | $235,960,993 |
| iShares S&P 500 AUD Hedged ETF (ASX: IHVV) | $232,411,736 |
| Vanguard Australian Shares High Yield ETF (ASX: VHY) | $174,883,785 |
Top 10 ETFs for outflows
| ASX ETF | Amount |
| iShares S&P 500 ETF (ASX: IVV) | -$461,301,546 |
| Magellan Global Fund (Open Class) (Managed Fund) (ASX: MGOC) | -$189,775,555 |
| iShares Global High Yield Bond (AUD Hedged) ETF (ASX: IHHY) | -$133,228,387 |
| iShares MSCI Emerging Markets ex China ETF (ASX: EMXC) | -$70,942,670 |
| iShares MSCI EAFE ETF (ASX: IVE) | -$70,120,623 |
| iShares Core FTSE Global Infrastructure (AUD Hedged) ETF (ASX: GLIN) | -$67,261,421 |
| Betashares Global Sustainability Leaders ETF (ASX: ETHI) | -$53,986,599 |
| Betashares Australian Credit Income Active ETF (ASX: HBRD) | -$52,576,579 |
| Airlie Australian Share Fund (ASX: AASF) | -$46,503,867 |
| Betashares Gold Bullion ETF – Currency Hedged (ASX: QAU) | -$44,214,386 |
How ASX ETFs investors repositioned last month
The VAS ETF is the most popular Australian shares ETF on the market, so it’s no surprise to see it take out the top spot.
VGS is the most popular international shares ETF, so it’s routine to see it close to the top as well.
The presence of IHVV in the top inflows list, and its unhedged counterpart IVV ETF in the top outflows, shows investors are mindful of currency changes over the past 12 months.
The Australian dollar has risen from just over 60 US cents 12 months ago to a three-year high of 70.8 US cents today.
As James Gruber, Equity Market Strategist at CommSec, points out:
When the Australian dollar strengthens, your international ETF returns shrink, and if the Australian dollar weakens, your returns improve.
Outflows from QAU ETF reflect profit-taking amid a 21% decline in the gold price over the first three weeks of March.
Sprott Managing Partner, Paul Wong, said investors need not be worried though.
Wong added:
Gold’s March drop reflects a liquidity crunch, not a breakdown in its long-term role.
As financial stress builds, gold is likely to reassert itself as a key monetary anchor.
Another interesting trend is the inflows into non-US international ETFs, reflecting the poorer performance of US markets this year.
In the year to date, the S&P 500 Index (SP: .INX) has lifted just 0.6% compared to a 3% bump for the ASX 200.
The post How ASX ETF investors repositioned as the Iran war shook markets appeared first on The Motley Fool Australia.
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More reading
- I’m planning to buy loads of these ASX ETFs for my retirement
- How to turn $20,000 into $100,000 with ASX ETFs
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- 3 reasons why the Vanguard Australian Shares Index ETF (VAS) could perform strongly
- 5 Vanguard ETFs for Aussies to buy this month
Motley Fool contributor Bronwyn Allen has positions in Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF, Vanguard Msci Index International Shares ETF, and iShares S&P 500 Aud Hedged ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF and iShares S&P 500 ETF. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.