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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
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
- Geared share exposures were the top two performing products of the half-year – BetaShares Geared Australian Equity fund (hedge fund) (ASX: GEAR) up 45% and BetaShares Geared U.S. Equity Fund (hedge fund) (ASX: GGUS) up 41%
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.