ETF industry sets new milestones

The Australian exchange traded fund (ETF) industry has recorded new highs for the month of March in month-on-month funds under management (FUM) and Australian Securities Exchange (ASX) trading value in the last 12 months.

Betashares’ monthly Australian ETF review found the industry’s FUM grew from February to March by two per cent, seeing a total monthly market capitalisation increase of $2.8 billion and ending the month with a new record high of $142.6 billion in FUM.

ASX ETF trading value also increased by 23 per cent from February to hit a total value of $11.1 billion, the highest ASX ETF trading value seen in the last 12 months.

ETF investor flows remained positive at $0.7 billion and accounted for 25 per cent of the monthly growth, with the majority of growth coming from asset value appreciation. The industry also grew by 5.3 per cent year-on-year or $7.2 billion.

The review said there were 327 exchange traded products (ETPs) trading on the ASX, with two new Active ETF launches: Janus Henderson’s environmental, social and governance (ESG) credit strategy and Intelligent Investor’s Value Share Fund.

Vanguard’s Australian Shares Index ETF, Magellan’s Global Fund (Open Class) (Managed Fund) and Vanguard’s MSCI Index International Shares ETF continued as the top three products by market cap in March. The Magellan fund also saw the largest amount of outflows at just over $305 million.

“This month we also saw a rare new entrant to the “Top 10” league table (largest 10 products by market cap in the industry), with our Australian Shares ETF (ASX: A200) entering the Top 10 for the first time and coinciding with a reduction in management fees in late February – at 0.04% p.a. management costs, A200 is the world’s lowest cost Australian shares ETF,” the review said.

“Fixed Income exposures lead the way in terms of flows with the category recording the highest level of net flows this month ($350m) and also in the year to date.

“Broad Australian equities products also continued to receive flows, as has been the case for the year more broadly.

“In terms of category outflows, we saw outflows from global equities exposures (-$136m). This marks a very striking change to previous years, with international equities flows being exceptionally light in the year to date, with investors continuing to take a cautious stance towards equities more generally in preference to fixed income and cash exposures.”