The assets under management (AUM) of the local ETF industry grew by 3.6 per cent in January, according to the latest Betashares Australian ETF Review, reaching a total of $138.5 billion.
This eclipsed the previous all-time high of $136.9 billion reached in December 2021 and puts the industry on track to hit $150 billion in AUM by the end of the year as previously forecast by both Betashares and VanEck.
“The year 2023 started with a bang for the Australian ETF industry, with the global sharemarket rebound and net investor inflows causing the industry to grow to a new all-time high in assets under management,” said Betashares chief commercial officer Ilan Israelstam.
Mr Israelstam explained that the bulk of the AUM growth last month was due to the market rally, while only around 12 per cent was attributable to net flows, which totalled $0.6 billion.
On an annual basis, he noted that the growth of the Australian ETF industry’s AUM remains positive but slow, increasing by 5.1 per cent or $6.7 billion.
During January, ASX ETF trading value rose by 5.1 per cent compared to a month earlier to a total of $7 billion. Three new products were listed on the exchange during the month, including an Australian hedge fund from Milford and two global equity Active ETFs from Alphinity.
“It was a dramatically positive month for performance in the crypto space which recorded a significant turnaround,” Mr Israelstam commented.
“As such, our Crypto Innovators ETF (ASX: CRYP) was the best performing ETF this month, returning [approximately] 48 per cent for the month. Tech also rebounded heavily resulting in tech-focused exposures rallying.”
After CRYP, the Global X 21Shares Bitcoin ETF (ASX: EBTC) and the Global X 21Shares Ethereum ETF (ASX: EETH) were the next best performers, returning 34.3 per cent and 27.4 per cent, respectively.
These were followed by the Global X Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS), which rose by 24.9 per cent, and the Betashares Online Retail and E-Commerce ETF (ASX: IBUY), which gained 15.3 per cent.
“As has been the case for the last few months, we once again saw the fixed income category receiving the highest level of inflows ($233 million) followed by international equities ($169 million), with investors this month shunning the usually popular Australian equities category which received net outflows of $38 million,” said Mr Israelstam.
“Notably, however, and notwithstanding the strong gains for the month, investors continued to buy short exposures which received [approximately] $150 million of net inflows — potentially illustrating that investors believe the worst is not yet over for the sharemarkets.”
Elsewhere, the cash category received $135.9 million of inflows and the multi-asset category received $11.6 million, while commodities (-$42.4 million), listed property (-$16.0 million), and currency ($3.7 million) all saw outflows.
Notably, Mr Israelstam also pointed out that Betashares overtook iShares to become the second largest ETF manager in the country as of the end of January.
