Betashares Australian ETF Review: September 2023

September 2023 Review: Industry declines in value as markets fall, while flows remain strong

The second highest net flows of the calendar year were not enough to combat a decline in asset values, as global sharemarket falls caused the industry to decline in September

Exchanged Traded Funds Market Cap
• Australian Exchange Traded Funds Market Cap (ASX + CBOE): $152.9B 
• ASX CHESS Market Cap: $137.9B1
• Market Cap increase for month: -2.0%, -$3.1B
• Market Cap growth for last 12 months: 22.9%, $28.5B

New Money
• Net inflows for month: $1.7B – 2nd highest inflows for 2023 to date

Products
350 Exchange Traded Products trading on the ASX & CBOE
Nine new ETFs launched: Betashares launched two US Treasury Bond ETFs including the first UTIP Inflation-Protected U.S. Treasury Bond Currency Hedged ETF and a US10 U.S. Treasury Bond 7-10 Year Currency Hedged ETF ; the ASX had a further 5 ETF launches in the Government Bond & thematic space by VanEck, Global X and iShares. 2 new funds were launched on CBOE – Active ETFs from Coolabah Capital (Active short term bonds) and JPMorgan (Active Emerging Markets equity)
1 XTB single bond exposure was closed

Trading Value
• After very high levels of trading value last month, trading value dropped back by ~20% in September, with ASX trading value of $9B for the month

Performance
URNM Global Uranium ETF was the best performing product for the second month in a row, rising an additional 24% (after the ~15% rise last month). With sharp falls in the US sharemarket in September, geared short US equities exposures such as BBUS U.S. Equities Strong Bear Hedge Fund – Currency Hedged performed strongly (~13% for the month)

Source: ASX, CBOE

Top 5 category inflows (by $) – September 2023

Broad Category Inflow Value
International Equities $582,641,062
Australian Equities $508,148,070
Fixed Income $475,245,385
Cash $78,162,605
Multi-Asset $43,254,425

 

Comment: For only the second time in the last 12 months, we saw a return to meaningful inflows in the International equities ETF segment, which was the highest category for new money ($583m). Australian equities also had strong inflows ($508m), and it appears as though ETF investors are making a return to equity investing after focusing heavily on Fixed Income exposures for the majority of the year to date.

Source: ASX, CBOE

Top sub-category inflows (by $) – September 2023

 

Sub-category Inflow Value
Australian Equities – Broad $408,422,025
Australian Bonds $289,369,893
International Equities – Developed World $253,281,657
International Equities – US $213,222,231
Global Bonds $175,619,140

Top sub-category outflows (by $) – September 2023

Sub-Category Inflow Value
Australian Equities – Large Cap ($43,527,379)
Australian Equities – Short ($19,421,259)
Oil ($15,717,460)
International Equities – E&R – ESG Lite ($8,595,741)
Other ($6,285,448)

Comment: Like last month, there were very little outflows at a category or sub-category level this month, with ETF investors largely choosing to hold or add to their positions, in aggregate.

*Past performance is not an indicator of future performance.

1. Since February 2023, the ASX started reporting additional data on a CHESS-only basis. The primary use of such data is that it excludes, amongst other things, the FuM and Flows in ‘dual class’ Active ETFs and potentially provide a more accurate picture of exchange traded activity.

This article mentions the following funds

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Written by

Ilan Israelstam

Chief Commercial Officer

Investor & founder with a Financial Services & Fintech focus. Co-founder of Betashares. Passionate about entrepreneurship and startups.

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