BetaShares Australian ETF Review - Half Year 2019 | BetaShares

BetaShares Australian ETF Review – Half Year 2019

BY Ilan Israelstam | 17 July 2019
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Aus ETF Review - Half year 2019

Reading time: 4 minutes

INDUSTRY BREAKS THE $50B BARRIER!

It has been another strong performance by the Australian ETF industry in the first six months of 2019. The industry’s funds under management increased by a very significant 25% for the half, to end the financial year at a new record high of $50.9B, with the industry growing FuM by a full $10.1B. Read on for more details.

Australian ETP Market Cap: 2001 – June 2019

ETF Market cap_June19

CAGR: Compound Annual Growth Rate
Source: ASX, BetaShares

Market cap

  • ASX Exchange Traded Product Market Cap: $50.9B – New record high
  • Market cap increase for last six months: 25%, +$10.1B 
  • Market cap growth for last 12 months: 30%, + $11.7B

New money

  • Unit growth for half year (units outstanding by number): 10%
  • Net new money for half year (units outstanding by % value): +$4.4B

Comments: The source of growth for the industry was split approximately evenly, with 43% of the growth coming from net inflows (i.e. rather than asset appreciation). This compares to a figure of $2.7B for the first half of 2018, showing that the pace of industry growth is well and truly on the rise. 

Products

  • 244 Exchange Traded Products trading on the ASX – 7 new products launched in the half year, 8 products matured, 1 product closed

Comments: Only 7 new products launched in the first half of 2019 (compared to 10 new products launched in the first half of 2018). That said, we expect significantly more product launches in the second half of the year.

Trading value

  • Increase in trading value of 11% compared to the previous half-year period

Performance

Comments: Best-performing exposures for the half-year were Geared shares exposures, including the Geared Australian and the Geared U.S. equities funds which each recorded +40% performance for the first 6 months of the year.

 

Top 5 category inflows (by $) – YTD

Category                                                  Inflow Value
Fixed Income $1,377,451,652
International Equities $1,317,047,327
Australian Equities $852,041,235
Cash $375,087,194
Australian Listed Property $220,776,169

Comment: 2019 has been notable in the significant growth in flows into Fixed Income ETFs. This is the first time it has been the #1 category for flows,  for the the first half of the year. International equities flows remain strong as a clear #2 category. 

 

Top category outflows (by $) – YTD

Category                                                  Outflow Value
Currency ($ 54,957,207)
Commodities ($ 12,688,894)

Comment: Outflows were generally very low, with profit taking by investors in U.S. Dollar exposures. We also saw redemptions in Gold products as the price of gold rallied. 

Top sub-category inflows (by $) – YTD

Sub-Category   Inflow Value
Australian Bonds $ 1,171,959,510
International Equities – Developed World $ 726,299,530
Australian Equities – Broad $ 718,959,801
Cash $ 375,087,194
International Equities – Sector $ 256,862,831

 

Top sub-category outflows (by $) – YTD

Sub-Category                                                 Outflow Value
Currency ($54,957,207)
International Equities – Europe ($53,986,147)
Australian Equities – Geared ($48,770,600)
Gold ($9,131,044)
Oil ($6,056,013)

Comments: Australian bonds were very much the dominant sub-category for flows, with the next sub-category, Developed World equities, trailing quite far behind. From an outflows perspective, we saw outflows in European equities, mirroring global ETF flows which have also been negative for that region.

Given the fast growth of the industry this year to date, we are upgrading the forecast we made at the end of last year ($50-$55B) and now expect total industry FuM at end 2019 to be in the range of $55-$60B. Stay tuned for our Global ETF Review for the second quarter of 2019, coming soon!

 

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