Following a record-setting February, the Australian ETF industry hit a new record of $142.6 billion in funds under management (FUM), which represented a $2.8 billion (2 per cent) month-on-month increase.
According to the latest Betashares Australian ETF Review, the growth in March came primarily from asset value appreciation, although investor flows remained positive at $0.7 billion (a quarter of the monthly growth).
“The strong rise in global sharemarkets, together with continued investor flows, allowed the Australian ETF industry to once again set a new all-time high in funds under management,” said Ilan Israelstam, Betashares chief commercial officer.
ASX ETF trading value was 23 per cent higher than February for a total value of $11.1 billion, which is the highest ASX ETF trading value recorded for the last 12 months.
“Over the last 12 months, we’ve seen the industry grow in size, albeit at a far slower pace than previous years — with an increase of 5.3 per cent year on year, or $7.2 billion,” Mr Israelstam said.
Two new active ETF products launched in March, an ESG-oriented credit strategy from Janus Henderson and Intelligent Investor’s Value Share Fund.
“Global growth exposures came back into vogue in March, leading to strong gains in bitcoin and crypto products, as well as technology exposures more generally,” Mr Israelstam said.
“Gold mining products also rallied strongly.”
Betashares said that its Australian Shares ETF (ASX: A200) entered the Top 10 (largest 10 products by market cap in the industry) for the first time. The entrance coincided with a reduction in management fees to 0.04 per cent p.a in late February, which the firm said made it the world’s lowest cost Australian shares ETF.
“Fixed income exposures lead the way in terms of flows with the category recording the highest level of net flows this month ($350 million) and also in the year to date,” Mr Israelstam said.
“Broad Australian equities products also continued to receive flows, as has been the case for the year more broadly.”
He added that in terms of category, there were $136 million in outflows from global equities exposures.
“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,” Mr Israelstam said.