Australian ETF Review – Raise the bat!
The Australian ETF industry now exceeds $100 billion in funds under management (FUM), topping the milestone figure for the first time just three months after the end of a record-breaking 2020. The milestone was met after a very strong month for growth, driven by a combination of asset price appreciation, a large unlisted fund conversion and solid net flows. Read on for more details, including best performers, asset flow categories and more.
Australian ETP Market Cap: August 2001 – March 2021
CAGR: Compound Annual Growth Rate. Source: ASX, Chi-X, BetaShares.
- ASX Exchange Traded Product market cap: $102.9B – all time end of month high, breaking through the $100B milestone
- Market cap change for month: 5.7%, $5.6B
- Market cap growth for the last 12 months: 80%, + $45.7B – all time high, fastest yearly growth on record
Now standing at an all-time high of $102.9B, the industry has added ~$8 billion in the first quarter of 2021. The industry’s market cap grew by a rapid 5.7%, bringing industry growth over the last 12 months to 80%, which represents absolute growth of $46B over this period. This represents the most rapid growth over a 12 month period in the industry’s history (includes large conversion of Magellan’s Global Fund in November 2020).
- Net new money for month (units outstanding by % value): +$1.3B
- 265 Exchange Traded Products trading on the ASX and Chi-X.
Seven new products launched, including BetaShares Climate Change Innovation ETF (ASX: ERTH)
- ASX ETF trading value declined slightly by 5% vs. the previous month.
Trading value remained high, declining slightly (5%) month on month, but remaining above the $7B mark
- From a performance perspective, we saw for the second month in a row continued outperformance from value-oriented exposures. The best performing fund was a Palladium exposure, along with strong gains in U.S. oriented exposures. The value-tilted BetaShares Global Income Leaders ETF (ASX: INCM) performed well (~10% for the month), as did our Geared U.S. Equity Fund.
Top 5 category inflows (by $) – March 2021
As they have for the year to date, equities once again led the way for inflows. This month we saw an even split of interest in Australian Equities ($618m of flows) and Global Equities ($618m).
Top 5 category outflows (by $) – March 2021
Source: Bloomberg, BetaShares.
Top sub-category inflows (by $) – March 2021
Top sub-category outflows (by $) – March 2021
Outflows came from cash and precious metals exposures (silver and gold), which saw negative performance in the month of March.
With the $100B milestone passed, we take the opportunity to revise our forecast for the industry’s growth for the remainder of 2021: we believe the industry will grow a further 25% over the rest of the year amid strong investor demand to end the year at ~$125B.
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Ilan was a founding team member of BetaShares and is responsible for corporate & product strategy. Previously, Ilan worked for The Boston Consulting Group (BCG), one of the leading global strategy consulting firms.