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ETF industry continues growth path as global markets fall
In a month where global equity markets fell significantly, the ETF industry managed to continue its growth trajectory. Total industry FuM at the month end was $36.9B, with the industry growing ~1% for the month ($339m). Trading value was also very strong, with ETF investors seeking out the liquidity of ETFs during a volatile month in equities – with the industry recording its second highest monthly trading value on record.
International equities continued to be the largest category for inflows, along with continued strong flows into fixed income. In addition, monthly outflows were limited at a category level, with the only category experiencing meaningful outflows being cash, primarily the result of institutional re-allocations rather than a particular sector trend.
Market cap
- ASX Exchange Traded Funds Market Cap: $36.9B – New record high
- Market cap growth for month: +0.6%, +$338.7m
- Market cap growth for the last 12 months: 41.1%, +$10.7B
New money
- New unit growth for month (units outstanding by number): 2.0%
- Net new money (units outstanding by $ value): +$468.8m
Comment: Global sharemarkets posted negative returns and, as such, all of the growth in the industry came from net new money rather than asset appreciation.
Products
- 228 Exchange Traded Products trading on the ASX
- Two new products launched this month, being the first two funds launched by BetaShares in alliance with Legg Mason – Equity Income Fund (managed fund) (ASX: EINC) and Real Income Fund (managed fund) (ASX: RINC)
Comment: It is marked that the first two funds launched in 2018 were Active ETFs. We expect further Active ETF product launches over the rest of the year.
Trading value
- Average trading value up 48% month on month to record the 2nd highest monthly value traded on record
Comment: Trading value was very strong this month, with ETF investors seeking out the liquidity of ETFs during a volatile month in equities.
Performance
- BetaShares Strong U.S. Dollar (hedge fund) (ASX: YANK) and Global Cybersecurity ETF (ASX: HACK) were the top performers this month, followed by the U.S. Equities Strong Bear Hedge Fund (ASX: BBUS) which provided a strong hedge to the falls that were experienced in the U.S. sharemarket
Top 5 category inflows (by $) – February
| Category | Inflow Value | |
| International Equities | $ 219,498,096 | |
| Fixed Income | $ 115,540,840 | |
| Australian Equities | $ 115,322,258 | |
| Multi-Asset | $ 31,333,922 | |
| Australian Listed Property | $ 20,189,164 | |
Top category outflows (by $) – February
| Category | Outflow Value | |
| Commodities | ($ 40,490,616) | |
| Short | ($ 455,450) |
Top sub-category inflows (by $) – February
| Category | Inflow Value | |
| International Equities – Developed World | $ 109,752,093 | |
| Australian Bonds | $ 95,617,653 | |
| Australian Equities – Resources Sector | $ 62,337,480 | |
| Multi-Asset | $ 31,333,922 | |
| International Equities – Sector | $ 28,036,405 | |
Top sub-category outflows (by $) – February
| Category | Outflow Value | |
| Cash | ($ 40,490,616) | |
| Australian Equities – Short | ($ 7,939,550) | |
| Australian Equities – Broad | ($ 689,877) | |