In our Australian ETF Review for May 2014 we reported that the industry had once again set a fresh record high, reaching $11.4B in funds under management. Total assets under management for the industry grew ~3% this month, an increase of $354m. Highlights of the report are set out below:
- ASX Exchange Traded Funds Market Cap: $11.4B – New record high
- Market cap growth for month: +3.2%, +$354.3m
- New unit growth for month (units outstanding by number): 2.2%
- Net new money (units outstanding by $ value): +$248.0
Comment: The industry continues to break records, reaching a fresh record high. Pleasingly ~70% of this month’s growth came from new money inflows (structural growth), while the remainder was driven from existing asset growth. May also represents the fourth consecutive month where new money inflows were greater than $200 million. To put this level of inflows into perspective, the last four months inflows exceeded the total amount of new money raised by the industry during the 2012 calendar year.
- 92 Exchange Traded Products trading on the ASX
- 1 new product launched in May – BetaShares Geared Australian Equity Fund (hedge fund) (ASX: GEAR)
Comment: We brought out the only new product this month, the first geared ETP. The Geared Fund provides investors with a simple way to obtain a cost-effective geared exposure to the returns of the Australian share market (as measured by the S&P/ASX 200 Index). The launch of this fund is only the third new fund for 2014. This compares with the last two calendar years where a total of 36 new products were launched. Notwithstanding the current slow pace of product launches, we still believe there are product gaps to fill for Australian investors when compared with more developed international markets and believe this slower product growth is only temporary.
- Trading value decreased 15.6% month on month
- Emerging Markets Equity ETFs were the best performers this month
Top Inflows by Category
|Aus. Equities – Broad||$77,636,325|
|Aus. High Yield||$38,527,409|
|International Equities – Developed||$33,510,000|
Top Outflows by Category
|International Equities – Emerging Markets||($1,129,629)|
Comment: In terms of inflows by category, there were strong inflows across the broad range of domestic equities exposures, as well as high yield equities and the Cash ETF. Similarly to last month, net outflows were limited this month and primarily involved selling out of emerging markets equities exposures after strong performance gains.