ETFs riding the record-high wave

Yasmine Raso

Senior Journalist, Financial Newswire

12 May 2023

The Australian exchange traded fund (ETF) industry has recorded yet another month of positive flows to set a new record high in funds under management (FUM) of $146.0 billion.

Seeing 2.4 per cent in month-on-month growth or a total monthly market cap increase of $3.4 billion, Betashares Australian ETF Review for the month of April attributed this to asset value appreciation like last month.

This comes despite investor flows remaining positive at $0.8 billion, amounting to 24 per cent of monthly growth. The industry has also recorded growth of 9.4 per cent or $12.5 billion year-on-year in the last 12 months.

Fixed income products have again surged ahead to generate the highest amount of net flows at $371 million, while global equities again saw outflows at $37 million.

Of the now 329 exchange traded products (ETPs) now on the Australian Securities Exchange (ASX), Global X’s Physical Platinum and Betashares’ Crypto Innovators ETF were the top performing products of the month returning approximately 10 per cent.

“This month we spotlight the asset gathering track-record of ‘dual class’ Active ETFs and reveal the surprisingly limited levels of actual assets under management in products which have been ‘converted’ into Active ETFs from existing unlisted managed funds,” the report said.

“Strikingly, we find that only 20% of assets in these dual class products are held via CHESS, meaning the bulk of assets have come either from the initial converted assets or via buying in the traditional unlisted managed fund class.

“The analysis further illustrates that “new” Active ETFs, i.e. launched in and of themselves rather than via ‘conversion’, have gathered 75% more CHESS-sponsored assets than ‘dual class’ products and that the largest of these products (HBRD) has almost 2x the level of CHESS-sponsored FuM than the second biggest product.”

There were only two new products made available this month, with Global X launching an Australian shares ETF and a fixed income ETF.