BetaShares Australian ETF Review – Half Year Review 2014 | BetaShares

BetaShares Australian ETF Review – Half Year Review 2014

BY Ilan Israelstam | 8 July 2014
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We recently released our Half Yearly Australian ETF Review, where we reported that Australia’s exchange traded fund industry continued to soar to record levels in the first half of 2014, hitting a fresh record high market capitalisation of $11.6B as at end June 2014. Market capitalisation for the industry grew ~17% for the half, adding $1.7B to the industry. Over the last twelve months, the industry’s growth has been an impressive 52.7%, with market capitalisation growing $4.1B. Highlights of the report are set out below:

Market Cap

  • ASX Exchange Traded Funds Market Cap: $11.6Bnew record high
  • Market cap growth for half year:  17.4%,+ $1.74B
  • Market cap growth for last twelve months: 52.7%, +$4.1B

New money

  • New unit growth for half year (units outstanding by number): 19.1%
  • Net new money (units outstanding by $ value): +$1.66B

Comment: The industry continued to reach new heights, with a very impressive 12 month growth rate of over 50%. As you will see from the above, virtually all the growth in the half derived from net inflows, investors continuing to support ETFs notwithstanding little price growth in the markets. The future of the industry looks rosy and we retain our end of 2014 forecast of an industry size of between $13-$15B, with expectations at the higher end of the range.

Products

  • 92 Exchange Traded Products trading on the ASX
  • 3 new product launched in the half year 

Comment: Product development activity continues to be low, with only 3 new products launching in the period. However, we do not expect this low activity to continue, and  expect significant new launches in the second half.

Trading Value

  • Trading value marginally decreased (-3%) compared to previous half year period

Performance

  • Listed Property and Commodity exposures the best performing products for the half year

Top Inflows by Category

 

Category Inflow Value
International Equities – Developed $489,654,185
Aus. High Yield $353,119,426
Aus. Equities – Broad $298,877,831
Cash $222,970,457
A-REIT Sector $88,465,093

Comment: Over the course of the half, investors were were particularly drawn to international equities, with ~$500m of net inflows into these products over the perioIn addition, high yield equities continued to be a major theme, attracting over $350m of net inflows. At a product level, income-oriented products were the most popular with BetaShares Australian High Interest Cash ETF (AAA) and BetaShares Equity Yield Maximiser Fund (YMAX) recording the #1 and #3 largest net inflows for the half. Vanguard Australian Shares Index ETF (VAS) recorded the second highest level of inflows for the same period.

Top Outflows by Category

Category Outflow Value
Style ($31,103,666)
Commodities ($29,005,460)
Financials Sector ($9,159,807)
Resources Sector ($552,033)

Comment: Total outflows for the period were muted, largely confined to a single style based ETF, Russell Australian Value ETF (RVL) and ETFS Physical Gold (GOLD) as gold continued to be shunned by investors.

 

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