Aussie ETF industry records high in May

Oksana Patron

14 June 2023

The Australian exchange traded fund (ETF) industry saw new heights in May thanks to the strongest inflows recorded in the year to date, according to Betashares Australian ETF Review: May 2023.

However, the study also found that during the same month the actual asset class performance was very mixed.

The Australian ETF Industry’s funds under management (FUM) grew by 1.0% month-on-month, for a total monthly market cap increase of $1.4 billion. Industry funds under management ended the month at $147.4 billion, setting a new record high.

Also, for the first time in the calendar year, investor inflows exceeded $1 billion, with $1.1 billion of net inflows recorded, representing 80% of the month’s growth.

Over the last 12 months the industry has grown by 12.3% year on year, or $16.1 billion.

“We also saw a new entrant into the ‘big leagues’ with our Nasdaq 100 ETF entering the Top 10 largest ETFs the country for the first time as growth exposures performed strongly,” the  firm said in the review.

On top of that, it was a very busy month in product launches, with 10 new products launches.

“It was very much a month where growth exposures roared back to life, with the best performing products being tech-themed. Australian equities on the other hand had negative performance as our reserve bank continued to hike interest rates.”

Australian fixed income exposures led the way in terms of flows with the category having recorded the highest level of net flows this month ($480 million), and broad Australian equities products continued to receive flows, as has been the case for the year more broadly.

In terms of category outflows, once again there were (small) outflows in global equities exposures (- $7 million).

At the same time, global equities products were typically the most popular category in Australian ETFs but have now received net outflows for three months in a row as investors preference Australian over global share exposures, presumably due to continued concern over likely recessions in a number of key markets including the US.