BetaShares Australian ETF Review: Year End 2013 | BetaShares

BetaShares Australian ETF Review: Year End 2013

BY Ilan Israelstam | 14 January 2014
Share

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: $10Bnew 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)

 

Leave a Reply