Aussie ETF industry suffers decline of almost $2bn

By Jon Bragg

May 10 2022
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Falling global share markets led to a decline in the value of the local ETF industry during April.

The market cap of Australian ETFs fell by $1.9 billion to $133.5 billion in April, representing a fall of 1.4 per cent compared to the previous month.

The latest Australian ETF review from BetaShares also revealed that local ETFs recorded $1.2 billion in net flows for the month, similar to $1.3 billion in flows seen during March.

“Following a March in which the industry grew in size, and notwithstanding positive net flows, the Australian ETF industry dropped in value in April, reflecting falls in global sharemarkets, and representing the third month out of four in 2022 in which the industry has declined,” the firm said.

While down on an annual basis, the value of Australian ETFs has risen by 22.7 per cent or $24.7 billion over the past year.

Trading values plunged 35 per cent to $7.5 billion, the lowest level in 11 months, with the Vanguard Australian Shares Index ETF ($39.2 million), the iShares Core S&P/ASX 200 ETF ($34.6 million) and the BetaShares Australian Strong Bear Hedge Fund ($15.8 million) ranking as the top ETFs by average daily trading value.

BetaShares attributed the overall decline in trading value to the impact of the Easter period as well as investor caution during the month.

The top ETF category by monthly inflow value was international equities ($513.1 million), ahead of Australian equities ($299.2 million), fixed income ($223.0 million), multi-asset ($89.8 million) and cash ($64.7 million).

Meanwhile, ETFs in the short category suffered the largest outflows ($24.3 million) followed by commodities ($5.2 million) and currency ($3.2 million).

In terms of individual ETF inflows, the Vanguard Australian Shares Index ETF ($328.0 million), the Vanguard MSCI Index International Shares ETF ($126.0 million) and the BetaShares Australian Government Bond ETF ($105.9 million) ranked as the top three.

On the other end of the spectrum, the Magellan Global Fund Open Class Managed Fund recorded $270.9 million in outflows, followed by the iShares Core S&P/ASX 200 ETF ($156.4 million) and Perth Mint Gold ($60.1 million).

Two short ETFs were the top performers during the month with a 37.6 per cent surge for the ETFS Ultra Short Nasdaq 100 Hedge Fund and a 23.1 per cent rise for the BetaShares US Equities Strong Bear Currency Hedged Hedge Fund.

Other top performers included the BetaShares Strong US Dollar Fund Hedge Fund (12.7 per cent), the ETFS Physical Palladium (8.1 per cent) and the iShares S&P Global Consumer Staples ETF (6.3 per cent).

Just one new product was launched in April - BetaShares Australian Quality ETF - and a total of 290 exchange traded products were trading on the ASX.

By market cap, the Vanguard Australian Shares Index ETF ($11.0 billion) and the Magellan Global Fund Open Class Managed Fund ($10.9 billion) were Australia’s largest ETFs.

Vanguard has recorded $2.9 billion of inflows so far this year for a 49 per cent share of the ETF industry inflows overall, while outflows for Magellan in 2022 have totalled $1.5 billion.

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