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Look beyond the headlines & record trading value!
Dramatic sharemarket falls caused the Australian ETF industry to fall in value, declining 3.2% ($1.3B) to end the month at $40.8B. That said, observers of the industry need to look beyond the headline AuM figure which was caused entirely by asset value depreciation, as net flows were, in fact, positive, with the industry taking in $760m of new money. Perhaps even more strikingly, the industry recorded its highest ever trading value in the month of October. Read on for details of the month in ETFs.
Market cap
- ASX Exchange Traded Funds Market Cap: $40.8B
- Market cap decline for month: – 3.2%, -$1,342M
- Market cap growth for the last 12 months: 22%, + $7.3B
New Money
- New unit growth for month (units outstanding by number):$1.5B
- Net new money for month (units outstanding by $ value): +$759M
Comment: Net flows into the industry were, in fact, positive, with the industry taking in ~$760m of new money
Products
- 243 Exchange Traded Products trading on the ASX – 2 new products launched on the ASX
Comment: Product development continued with 2 new products launched including BetaShares Global Income Leaders ETF (ASX: INCM) and a Global Infrastructure ETF from Vanguard.
Trading value
- Trading value $3.9B, +36% for the month to reach a record all-time monthly high
Comment: The previous record was $3.7B in November 2017. It appears as though, much like the more mature and developed U.S. ETF industry, Australian investors are also utilising the liquidity benefits of ETFs during times of market volatility, with ETFs being effective and easy ways to express investment views in such times.
Performance
- Given the market declines the top performing products were the BetaShares Bear Suite – namely BetaShares U.S. Equities Strong Bear Hedge Fund (ASX:BBUS) which produced a 17.5% monthly return, BetaShares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) (15.6% return) and the BetaShares Australian Equities Bear Hedge Fund (ASX: BEAR) (6.7%).
Top 5 Category Inflows (by $) – October 2018
| Category | Inflow Value |
| Australian Equities | $369,994,465 |
| International Equities | $164,805,747 |
| Fixed Income | $125,969,365 |
| Cash | $85,508,001 |
| Commodities | $24,491,560 |
Comment: For the first time in the year to date, Australian equities products received the highest amount of flows at a product level, although the result was swayed by large institutional flows into several broad market Australian equities products, including our A200 ETF.
Top Category Outflows (by $) – October 2018
| Category | Outflow Value |
| Short | ($33,429,420) |
| Currency | ($21,708,550) |
Comment: Net outflows at a category level came from the Short funds, with investors likely taking profits as the products rallied as markets fell.
Top Sub-Category inflows (by $) – October 2018
| Category | Inflow Value |
| Australian Equities – Broad | $350,477,658 |
| International Equities – Developed World | $138,315,282 |
| Australian Bonds | $117,325,329 |
| Cash | $85,508,001 |
| Australian Equities – Geared | $27,882,447 |
Top Sub-Category Outflows (by $) – October 2018
| Category | Outflow Value |
| Australian Equities – Resources Sector | ($31,532,185) |
| Australian Equities – Short | ($29,797,620) |
| International Equities – US | ($22,559,085) |
| Currency | ($21,708,550) |
| Australian Equities – High Yield | ($8,698,563) |