BetaShares Australian ETF Review - March 2021 | BetaShares

BetaShares Australian ETF Review – March 2021

BY Ilan Israelstam | 14 April 2021
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Australian ETF Review March 2021 image

Reading time: 3 minutes

MARCH 2021: RAISE THE BAT! INDUSTRY BLASTS THROUGH THE $100B MARK

The Australian ETF industry now exceeds $100 billion in funds under management (FUM), topping the milestone figure for the first time just three months after the end of a record-breaking 2020. The milestone was met after a very strong month for growth, driven by a combination of asset price appreciation, a large unlisted fund conversion and solid net flows. Read on for more details, including best performers, asset flow categories and more.

Australian ETP Market Cap: August 2001 – March 2021

Australian ETP market cap - March 2021

CAGR: Compound Annual Growth Rate
Source: ASX, Chi-X, BetaShares. 

Market cap

  • ASX Exchange Traded Product market cap: $102.9B1 – all time end of month high, breaking through the $100B milestone
  • Market cap change for month: 5.7%, $5.6B
  • Market cap growth for the last 12 months: 80%, + $45.7B – all time high, fastest yearly growth on record

Comment: Now standing at an all-time high of $102.9B, the industry has added ~$8 billion in the first quarter of 2021. The industry’s market cap grew by a rapid 5.7%, bringing industry growth over the last 12 months to 80%, which represents absolute growth of $46B over this period. This represents the most rapid growth over a 12 month period in the industry’s history (includes large conversion of Magellan’s Global Fund in November 2020). 

1. Includes total FuM for ETFs trading on both ASX and Chi-X

New money

  • Net new money for month (units outstanding by % value): +$1.3B

Products

  • 265 Exchange Traded Products trading on the ASX and Chi-X.

Comment: Seven new products launched, including BetaShares Climate Change Innovation ETF (ASX: ERTH) 

Trading value

  • ASX ETF trading value declined slightly by 5% vs. the previous month.

Comment: Trading value remained high, declining slightly (5%) month on month, but remaining above the $7B mark

Performance

  • From a performance perspective, we saw for the second month in a row continued outperformance from value-oriented exposures. The best performing fund was a Palladium exposure, along with strong gains in U.S. oriented exposures. The value-tilted BetaShares Global Income Leaders ETF (ASX: INCM) performed well (~10% for the month), as did our Geared U.S. Equity Fund.

Top 5 category inflows (by $) – March 2021

Category Inflow Value
Australian Equities $618,968,086
International Equities $618,780,900
Fixed Income $124,550,233
Multi-Asset $102,665,834
Australian Listed Property $47,209,907

Comment: As they have for the year to date, equities once again led the way for inflows. This month we saw an even split of interest in Australian Equities ($618m of flows) and Global Equities ($618m).

Top 5 category outflows (by $) – March 2021

Category Outflow Value
Cash ($125,061,936)
Commodities ($77,868,349)
Short ($1,749,460)

Australian ETF flows by asset class - rolling 12 month

Source: Bloomberg, BetaShares.

Australian ETF flows by asset class - 4months Mar21

Source: Bloomberg, BetaShares.

Top sub-category inflows (by $) – March 2021

Sub-Category Inflow Value
Australian Equities – Broad $520,874,507
International Equities – Sector $189,108,519
International Equities – Developed World $137,404,235
Multi-Asset $102,665,834
International Equities – Emerging Markets $97,862,805

Top sub-category outflows (by $) – March 2021

Sub-Category Outflow Value
Cash ($125,061,936)
Silver ($46,911,007)
Gold ($23,442,137)
Australian Equities – Short ($11,399,643)
Australian Equities – High yield ($9,530,350)

Comment: Outflows came from cash and precious metals exposures (silver and gold), which saw negative performance in the month of March.

With the $100B milestone passed, we take the opportunity to revise our forecast for the industry’s growth for the remainder of 2021: we believe the industry will grow a further 25% over the rest of the year amid strong investor demand to end the year at ~$125B.

1 Comment

  1. Bill Johnstone  |  April 17, 2021

    Thanks very much for the heads up on INCM – it had been beneath my radar before this. I had GGUS on my watch list, but thanks for confirming it’s rise. I classify it with other geared funds, and BEAR type funds as “gamblers funds”, especially as the results of the huge US bond sales were impossible to predict – by me at least.

    I REALLY appreciate your inclusion of good fund performers, and what to watch out for, as I’m developing a new comparison workbook.

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