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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.
- 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.
- 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.
- 241 Exchange Traded Products trading on the ASX – no new products launched, 1 product matured
- Trading value increased 17% for the month
- Top performing products this month were Chinese equities exposures, followed by Australian listed property
Top 5 category inflows (by $) – March 2019
|Australian Equities||$ 252,107,282|
|Fixed Income||$ 200,182,711|
|International Equities||$ 191,338,506|
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
Top sub-category inflows (by $) – March 2019
|Australian Equities – Broad||$ 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
|International Equities – Europe||($17,651,587)|
|Australian Equities – High Yield||($16,536,513)|
|Australian Equities – Geared||($11,309,834)|
Comments: Investors retreated out of European Equity positions in March, perhaps to reallocate to domestic products, which continued to rally.