BetaShares Australian ETF Review - year end 2016 report | BetaShares

BetaShares Australian ETF Review – year end 2016 report

BY Ilan Israelstam | 31 January 2017
Share

ETF Industry thrives in a volatile year

The global ETF industry had another record year in 2016, receiving its highest ever level of net inflows (US$389B) and reaching over US$3.5T in assets under management (approximately 16% year on year growth)1.  The Australian ETF industry funds under management continued to grow rapidly, increasing 21% to end the year at a new record high of ~$26B. The industry grew FuM by $4.4B which, albeit slower than the record growth recorded in 2015, is a striking result given the levels of volatility and uncertainty in the broader macro environment.

Market Size & Growth

Market Cap

  • ASX Exchange Traded Funds Market Cap: $25.8B – new all-time record
  • Market cap growth for year: 21%, +$4.4B

New Money

  • New unit growth for year (units outstanding by number): 35%
  • Net new money (units outstanding by $ value): +$3.2B

Products

  • 198 Exchange Traded Products trading on the ASX
  • New products: 40 new products launched in the year (vs. 69 in 2015), 11 products closed

Trading Value

  • Trading value increased 5% compared to 2015 – record trading year for ETFs

Performance

  • Gold miners and resources the best performing products for 2016

Top 5 category inflows (by $) – 2016

Category   Inflow Value
International Equities $ 1,135,554,612
Australian Equities $ 884,394,790
Fixed Income $ 669,894,847
Cash $ 257,530,507
Australian Listed Property $ 201,825,081

*As per 2015, at a broad category level, the International Equities category received the highest level of inflows, followed by Australian Equities. We also saw good inflows into Fixed Income, a part of the industry that has traditionally been slow to develop. There were no outflows at a broad category level. 

Top sub-category outflows (by $) – 2016

Category                Inflow Value
International Equities – Europe ($ 43,275,866)
Australian Equities – Geared ($ 29,685,920)
Australian Equities – Value ($ 10,471,704)
International Equities – Asia ( $  2,113,734)

*Breaking down the broad categories into sub-categories provides a more nuanced view on where the money flows went in 2016. Developed World Equities followed by Australian bonds were the sub-categories with the highest level of inflows and European equities and Geared Australian equities receiving the highest level of outflows. 

We believe the industry will continue to grow strongly in 2017 – and forecast total industry FuM at end 2017 to be in the range of $30-$33B. Read our 2017 predictions article and stay with us to find out!


1 ETFGI
2 Plan for Life, Inflows for 12 months to end of September Quarter 2016 – Retail Managed Funds Industry

Leave a Reply