BetaShares Australian ETF Review - September 2020 | BetaShares

BetaShares Australian ETF Review – September 2020

BY Ilan Israelstam | 19 October 2020
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Australian ETF Review: September 2020

Reading time: 3 minutes

ALL-TIME NET FLOW RECORD BROKEN: >$2B IN A SINGLE MONTH 

The Australian ETF industry broke its all-time net flows record, receiving >$2B of net flows in a single month for the first time. As a result, and notwithstanding sharply falling global sharemarkets, the industry grew to end the month at $71.4B in FuM, another fresh record high. Read on for more details, including best performers, asset flow categories and more.

Australian ETP Market Cap: July 2001 – September 2020

Australian ETP Market Cap: August 2001 - September 2020

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

Market cap

  • ASX Exchange Traded Product Market Cap: $71.4B1 – all time end-of-month high
  • Market cap change for month: +0.9%, +$600M
  • Market cap growth for the last 12 months: +27%, + $15.2B

Comment: As a result of record net flows, and notwithstanding sharply falling global sharemarkets, the industry grew to end the month at $71.4B in FuM, another fresh record high. The overall growth of the industry was held back by asset value declines, leading to only modest FuM growth of $600M (0.9% month-on-month increase), with industry growth over the last 12 months of 27%, representing absolute growth of $15.2B over this period. 

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

New money

  • Net new money for month (units outstanding by % value): +$2.1B – largest net inflows on record, first time industry has received $2B+ in inflows in a month

Comment: With both the local and Australian sharemarkets, and technology stocks in particular, tumbling over the month of September, ETF industry growth was made up entirely of net new money which totalled $2.1B.

Products

  • 246 Exchange Traded Products trading on the ASX and Chi-X with four new products launching this month, all from Van Eck. One bond product matured in the month.

Trading value

  • ASX ETF Trading value up strongly vs. the previous month with total value traded of $7.7B, growing 17% vs. the previous month.

Performance

Top 5 category inflows (by $) – September 2020

Category   Inflow Value
Australian Equities $1,166,757,276
International Equities  $740,522,751
Fixed Income $289,275,448
Commodities $81,093,905
Multi-Asset $65,328,512

Comment: Equities exposures dominated net flows this month, with Australian equities in particular receiving significant flows ($1.2B net flows), heavily skewed by a record-breaking block trade into a Broad Australian Equities ETF. That said, international equities also received strong flows – with $740m of net new money.

Top category outflows (by $) – September 2020

Category   Outflow Value
Cash                       ($209,104,057)
Short                                   ($48,318,582)

Comment: Outflows were limited to Cash ETFs and Short Funds, with investors seemingly using the market pullback to take profits, particularly in the Short Australian Equities products.

Australian ETF Flows by Asset Class - Rolling 12 Month

Source: Bloomberg, BetaShares.

Australian ETF Flows by Asset Class - Last 4 Months

Source: Bloomberg, BetaShares.

Top sub-category inflows (by $) – September 2020

Sub-Category   Inflow Value
Australian Equities – Broad $1,046,954,911
Australian Bonds $226,717,514
International Equities – Developed World $214,334,084
International Equities – Sector $203,424,579
International Equities – US $139,201,380

Top sub-category outflows (by $) – August 2020

Category   Outflow Value
Cash ($209,104,057)
Australian Equities – Short ($49,085,766)
Oil ($9,850,768)

Comment: Flows were robust across a number of asset class categories this month, with international equities exposures dominating ($722m net flows). Investors however continued to diversify their portfolios away from equities with ~$370m into fixed income products and ~$200m into both cash and commodities ETFs (largely gold products). Outflows were limited to US Dollar products even as the USD fell in value vs. the AUD, with investors apparently concerned that continued AUD strength is possible.

ETF issuer flows

  • With 9 months of the year completed, flows by issuer for the year to date have become highly concentrated to the top two issuers. Combined, the #1 issuer (BetaShares) and #2 issuer (Vanguard) have received ~56% of all industry flows, with both receiving ~3x the flows of their closest competitor. 

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