The Australian ETF Industry continued to ‘zig’ in November, reaching a new record high of $20.8B funds under management, while the global and broad Australian share market ‘zagged’, recording a month of falling value.
Industry growth during the month came entirely from net inflows of $629m in new money, which more than made up for the overall share market declines. It appeared that savvy investors saw the decline in market value as an opportune time to enter the Australian equities market with broad Australian equities exposures being the most popular by inflows. Australian Financial Sector exposures recorded the best performance of the month – illustrating the utility of tactical sector tilts on the performance of an investment portfolio.
- ASX Exchange Traded Funds Market Cap: $20.8B – new record high
- Market cap growth for month: +1.4%, +$295m
- Market cap growth for last twelve months: 47.8%, +$6.8B
Comment: As the end of the year approaches the Australian ETF Industry continues its impressive growth with new money inflows more than making up for the broader sharemarket declines during November.
- New unit growth for month (units outstanding by number): 5.0%
- Net new money (units outstanding by $ value): +$629.2m
- 160 Exchange Traded Products trading on the ASX
- 17 new products launched this month
Comment: After the pause in new product activity during October, November saw a return to activity with an impressive 17 products launched onto the market. We launched the BetaShares Managed Risk Australian Share Fund (managed fund) (ASX:AUST), which offers investors the opportunity for broad Australian share market exposure with an in-built risk management strategy, on November 9th. The Australian Corporate Bond Company also launched 16 new exchange traded bonds.
The average trading value of the industry increased 9% month on month
The best performance this month came from Financials Sector exposures, including the BetaShares S&P/ASX 200 Financial Sector ETF (ASX: QFN).
Top 5 category inflows (by $) – November
|Aus. Equities – Broad||$256,162,305|
|International Equities – Developed||$112,132,032|
|International Equities – Global||$64,471,331|
|Aus. High Yield||$51,679,838|
|Aus. Equities – Large Cap||$43,522,020|
Comment: Broad Australian market exposures saw the biggest inflows for the month. It appears as though investors may be seeing the downturn in the share market value as an opportune time to invest in ETFs with Australian Equities exposure.
Top category outflows (by $) – November
|International Equities – Emerging Markets||($6,685,251)|
Comment: The only category to record outflows for the month was in emerging markets equities. The focus for redemptions during November was Asian exposures, particularly Chinese investments.