BetaShares Australian ETF Review - March 2019 | BetaShares

BetaShares Australian ETF Review – March 2019

BY Ilan Israelstam | 10 April 2019
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Aus ETF Review March 2019

Reading time: 5 minutes

AUSSIE! AUSSIE! AUSSIE!

  • The Australian ETF industry finished the first quarter strongly, recording 13% growth for the quarter to reach a fresh high
  • The industry ended March at a record $46.1B, with its market cap increasing by 2.9% (+$1.3B) over the month
  • Trading activity was also very strong, with the monthly trading level of $3.6B being the second highest on record (October 2018, or “Shock-tober”, remains the month with the highest trading level at $3.9B)
  • The majority of the industry’s growth this month (60%) came from net new money of ~$760m, with the remainder coming from continued asset value appreciation as markets rallied
  • No new products were launched this month, in what has been one of the quietest quarters for some time in terms of product development.
  • In stark contrast to virtually every month in the past few years it was Australian exposures which received the highest level of investment this month, with Australian broad market equities and Australian fixed income receiving strong interest (~$400m in net inflows between them) – investors may potentially feel that the tremendous rally we have seen in global shares may be coming to an end, and therefore are re-orienting back to Australian markets
  • For the second month in a row, it was Chinese exposures that performed the strongest, followed by Australian Listed Property products
  • Net outflows at a category level were once again limited. European equities products saw the largest amount of outflows as investors appeared to be concerned over the prospects of that region’s sharemarkets.

Market cap

  • ASX Exchange Traded Funds Market Cap: $46.1B – New industry record
  • Market cap increase for month: 2.9%, +$1,313M
  • Market cap growth for last 12 months: 26%, + $9.5B

Comment: A 2.9% increase in market cap during March brought the quarter to a strong close, growing 13% from the December 2018 quarter. 

New money

  • Unit growth for year (by number): +1.5%
  • Net new money for month: +$760.6m

Comments: 60% of industry flows came from net new money into the industry, the remainder was attributed to asset value appreciation, as markets continued their uptrend throughout the month. 

Products

  • 241 Exchange Traded Products trading on the ASX – no new products launched, 1 product matured

Trading value

  • Trading value increased 17% for the month

Performance

  • Top performing products this month were Chinese equities exposures, followed by Australian listed property

 

Top 5 category inflows (by $) – March 2019

Category                                               Inflow Value
Australian Equities $ 252,107,282
Fixed Income $ 200,182,711
International Equities $ 191,338,506
Short $ 55,428,020
Cash $ 39,830,455

Comment: As local markets soared in March, inflows shifted towards Australian Equities, whilst flows for International Equities took a step back, albeit a small one, as inflows remained relatively strong. March also saw a more defensive trend with rising inflows to Short and Cash ETPs, as the market life-cycle appears to be entering the latter stage of a bull-market. 

 

Top category outflows (by $) – March 2019

Category                                                  Outflow Value
Currency ($ 9,686,250)
Commodities ($ 100,867)

 

Top sub-category inflows (by $) – March 2019

Sub-Category   Inflow Value
Australian Equities – Broad $ 255,006,305
Australian Bonds $ 149,913,567
International Equities – Developed World $ 97,405,479
International Equities – Sector $ 63,669,581
Global Bonds $ 50,269,145

 

Top sub-category outflows (by $) – March 2019

Sub-Category                                                 Outflow Value
International Equities – Europe ($17,651,587)
Australian Equities – High Yield ($16,536,513)
Australian Equities – Geared ($11,309,834)
Currency ($9,686,250)
Silver ($514,168)

Comments: Investors retreated out of European Equity positions in March, perhaps to reallocate to domestic products, which continued to rally. 

We believe the industry will continue to grow strongly in 2019 – and forecast total industry FuM at end 2019 to be in the range of $50-55B. Read our 2019 predictions article and stay tuned for our monthly ETF review throughout the year!

 

4 Comments

  1. G’day, would BetaShares consider creating a lithium ETF based on the future potential for lithium batteries coupled with the vast Aussie lithium reserves? Would be great to see an ETF which contains MIN, PLS, GXY etc

    1. Gavin Montgomery  |  April 17, 2019

      Hi Tom,

      Thanks for putting that idea forward. I’d be more than happy to pass that onto the team.

      Cheers,
      BetaShares Client Services

  2. Greg O'Keeffe  |  April 23, 2019

    I’d be very interested in this.

    1. Gavin Montgomery  |  May 6, 2019

      Hi Greg,

      If you have any enquiries, you are welcome to either email us at info@betashares.com.au or call us on 1300 487 577.

      Thanks,
      BetaShares Client Services

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