BetaShares Australian ETF Review - January 2014 | BetaShares

BetaShares Australian ETF Review – January 2014

BY Ilan Israelstam | 11 February 2014
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Yesterday we released our Australian ETF Review for January 2014, which reported that, for the first time in 20 months, the Australian ETF Industry declined, finishing the month with  $9.8B in funds under management. Interestingly, though, the industry actually grew 1.2% by units with ~$150m of new money inflows this month. his indicates that the AuM has declined as a result of negative market movement, rather than net selling, which is the reason why we always suggest that industry observers ‘go beyond the headline’ AuM number when determining whether the industry is growing or declining Highlights of the report follow below:

Market Cap

  • ASX Exchange Traded Funds Market Cap: $9.8B
  • Market cap growth for month:  -0.4%, -$37.7m

New money

  • New unit growth for month (units outstanding by number): 1.2%
  • Net new money (units outstanding by $ value): +$148.8m

Comment: This is an example of a scenario where “structural” (i.e. unit) growth is positive, meaning the industry itself is growing but market-cap growth is declining. The decline in market cap was a result of negative performance in global equity markets.

Products

  • 90 Exchange Traded Products trading on the ASX
  • 1 new product commenced quotation – UBS IQ Research Preferred Australian Dividend Fund (DIV)

Comment: Another product has been launched in the crowded high yield/high dividend space. Will be interesting to see how it fares against a group of fairly entrenched rivals

Trading Value

  • Trading value decreased -10.4% month on month

Performance

  • Natural Gas and Gold products the best performers for the month

Top Inflows by Category

Category Inflow Value
Aus. Equities   – Broad $55,352,614
International Equities – Developed $38,019,132
Aus. High   Yield $26,946,133
Aus. Equities – Large Cap $13,210,729
A-REIT Sector $12,929,592

Comment: ~$100m of the of ~$150m net new money this month came from Australian equities exposures, with international equities inflows being relatively quiet compared to recent months.

Top Outflows by Category

Category Outflow Value
Commodities ($13,079,474)
Financials   Sector ($4,824,508)

Comment: Relatively small net outflows this month, the majority coming from unhedged gold – investors taking the opportunity to exit as the price of gold increased ~7% for the month.

 

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