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We recently released our 2013 year-end Australian ETF Review which provides further detail and statistics around the tremendous growth we experienced in our industry last year. 2013 was a hallmark year for the ETF industry, recording its highest ever growth in FuM of $3.5B, and reaching a record high of $10B. Industry funds under management grew rapidly, increasing 55%. Highlights of the report follow below:
Market Cap
- ASX Exchange Traded Funds Market Cap: $10B – new record high
- Market cap growth for year: 55%,+$3.5B
New money
- New unit growth for year (units outstanding by number): 35%
- Net new money (units outstanding by $ value): +$2.4B
Comment: Over the course of 2013, ETFs took in approximately $2.4 billion of new money, up
180% on 2012’s net inflows. By comparison, retail managed funds achieved just an 18% increase in net inflows in the 12 months to end September 2013 (Plan for Life). While the industry was assisted by strong equities capital growth, approximately 70% of the growth this year came from new money into the industry (i.e. “true structural growth”) – setting the stage for a strong 2014. Our forecast for 2014 is for the industry to end the year at $14B.
Products
- 89 Exchange Traded Products trading on the ASX
- Net new products: 5, 11 new products launched this year, 6 products closed
Comment: It is a sign of industry maturity to see ETF closures. 6 AII/Market Vectors sector ETF products were closed over the course of 2013
Trading Value
- Trading value increase 33% compared to 2012
Performance
- US equities products resoundingly the best performing products over 2013
$ Value Inflows/Outflows by Provider – 2013
| Provider | Creation Value |
| iShares | $1,332,813,583 |
| Vanguard | $686,647,015 |
| BetaShares | $277,619,792 |
| State Street | $82,880,841 |
| UBS | $37,572,473 |
| Russell | $21,990,464 |
| Market Vectors | $10,995,190 |
| Chimaera | ($29,502) |
| ETFS | ($89,407,070) |
Comment: Inflows were concentrated between three product issuers in the industry. iShares, Vanguard and BetaShares together accounted for 97% of the total net inflows over 2013.
Top 5 Inflows by Category
| Category | Inflow Value | |
| International Equities – Developed | $1,044,086,745 | |
| Aus. High Yield | $492,755,694 | |
| Aus. Equities – Large Cap | $190,670,895 | |
| Cash | $190,360,038 | |
| International Equities – Emerging Markets | $160,765,413 | |
Comment: International equities emerged as the key trend for the year, with approximately $1 billion flowing towards funds offering exposure to developed equities markets. US equities funds were overwhelmingly the best performing products of 2013, with the top performing fund returning 66%. The other prevalent theme for the year was the continued search for yield as $500 million of new money flowed into high yield products and another $200 million was allocated to the Australian High Interest Cash ETF.
Top Outflows by Category
| Category | Outflow Value | |
| Commodities | ($118,295,238) | |
| Style | ($70,041,377) | |
| Financials Sector | ($8,059,428) |