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Industry growth continues into new financial year
The Australian ETF industry continued to grow in the month of July, and is now just shy of $40B, reaching a record high of $39.98B. The industry grew 2.1% in the month ($812m), approximately half of which came from new inflows ($409m) and the remainder from asset growth. Read on for details of the month in ETFs.
Market cap
- ASX Exchange Traded Funds Market Cap: $39.98B – new record high
- Market cap growth for month: 2.1%, + $812M
- Market cap growth for the last 12 months: 33%, + $9.9B
New money
- New unit growth for month (units outstanding by number): +1.0%
- Net new money (units outstanding by $ value): +$409.0 M
Comment: Approximately half of the industry’s growth came from new inflows ($409m), the remainder from asset growth.
Products
- 231 Exchange Traded Products trading on the ASX
Comment: There was a pause in product development this month with no new ETFs launched, although we suspect that there will continue to be strong product growth for the remainder of 2018.
Trading value
- Trading value +15% on previous month
Performance
- The top performing products in July was the BetaShares Geared US Equities Fund (hedge fund) (ASX: GGUS) which returned ~9%, followed by BetaShares’ currency hedged Global Healthcare ETF (ASX: DRUG) and Global Banks ETF (ASX: BNKS)
Top 5 category inflows (by $) – July 2018
| Category | Inflow Value |
| International Equities | $339,560,996 |
| Fixed Income | $85,855,358 |
| Multi-Asset | $23,525,862 |
| Short | $11,475,865 |
| Commodities | $7,112,224 |
As has been the case for each month this year so far, International Equities continued to be the largest category for inflows, and this month this category was the overwhelming winner, receiving almost 4x the amount of net inflows as the next best category, which, once again, was Fixed Income.
Top category outflows (by $) – July 2018
| Category | Outflow Value |
| Cash | ($62,956,024) |
| Currency | ($5,858,745) |
Top sub-category inflows (by $) – July 2018
| Category | Inflow Value |
| International Equities – Developed World | $184,529,919 |
| Australian Equities – Broad | $127,277,083 |
| Australian Bonds | $78,896,381 |
| International Equities – Asia | $50,922,927 |
| International Equities – Sector | $47,067,665 |
Comment: Breaking down the broad categories into sub-categories provides a more nuanced view on where the money flows went in the past month. For example, looking at sub-category inflows we see that after Developed World International Equities it was Australian Equities that received the highest level of inflows.
Top sub-category Outflows (by $) – July 2018
| Category | Outflow Value |
| Australian Equities – Resources Sector | ($120,391,372) |
| Cash | ($62,956,024) |
| Currency | ($5,858,745) |
| Australian Equities – Ethical | ($5,852,790) |
| Australian Equities – Geared | ($4,514,477) |
There were net outflows in Australian resources exposures, with investors appearing to take profits after strong performance in this sector. US dollar investors also continued to take profits as the currency strengthened.