The Australian exchange traded fund (ETF) market rose to a new all-time high of $12.7 billion in September, despite a falling local share market, according to the BetaShares Australian ETF Review for September. In addition, an all-time high was registered in dollar value traded for the month. The industry grew by approximately $300 million over the month, driven almost exclusively from new money inflows rather than market movements, reinforcing the increasing popularity of ETFs as a portfolio tool. Highlights of this month’s report are set out below:
- ASX Exchange Traded Funds Market Cap: $12.7B – New record high
- Market cap growth for month: +2.6%, +$325.5m
- Market cap growth for last twelve months: 44.7%, +$4.0B
- New unit growth for month (units outstanding by number): 4.4%
- Net new money (units outstanding by $ value): +$363.5m
Comment: In a month where the Australian sharemarket sharply declined, all the growth in the exchange traded fund industry was attributable to net new inflows.
- 93 Exchange Traded Products trading on the ASX
- 1 new product launched this month – BetaShares S&P 500 Yield Maximiser Fund (managed fund) (UMAX)
Comment: Our UMAX launch was the only product to be launched this month, with product launches continuing to be slow so far in 2014. We do expect that the last quarter will be different however, with a number of new products expected to be on the market by the end of the year.
- Average trading value increased 44% month on month and reached an all time high for value traded
Comments: It is pleasing to see the industry break both stock (funds under management) and flow (trading value) records. Increased trading in exchange traded funds indicates investors embracing these products beyond ‘set and forget’ investments and using them as tactical portfolio tools.
- Global Healthcare Equities and Natural Gas the best performers
Top Inflows by Category
|International Equities – Developed||$119,793,534|
|Aus. Fixed Income||$90,376,846|
|Aus. High Yield||$66,049,128|
Comment: Buying activity increased heavily in currency and fixed income ETFs, as investors looked to profit from the decline in the Australian dollar and the gradual rise of bond yields. The decline of the Australian dollar to a four-year low against the US dollar this month, for instance, drove investors to the BetaShares US Dollar ETF (ASX: USD) in hopes of capitalising from a further fall.
Top Outflows by Category