Australia’s ETF industry funds under management (FUM) rose 1 per cent or $1.4 billion in May to a record $147.4 billion, according to the latest BetaShares Australian ETF Review.
Over the last 12 months, the industry has grown by 12.3 per cent year on year, or $16.1 billion.
Reversing a trend from recent months, May saw the strongest inflows recorded in the year to date, accounting for $1.1 billion or 80 per cent of the growth. In April, investor flows, while positive at $0.8 billion, accounted for 24 per cent of the total monthly growth.
Unlike April, which saw most of the assets class’ growth come from asset value appreciation on the back of the strong rise in global share markets during the month, May’s performance was more mixed and accounted for just $0.3 billion.
“In what has been very much a reoccurring theme this year, we once again saw Australian fixed income exposures lead the way in terms of flows with the category recording the highest level of net flows this month ($480 million),” commented BetaShares chief commercial officer Ilan Israelstam.
“Broad Australian equities products also continued to receive flows, as has been the case for the year more broadly.”
Australian equities recorded $433 million of inflows for the month, followed by the categories of cash ($121 million), listed property ($15 million), and commodities ($14 million).
“In terms of category outflows, we once again saw (small) outflows in global equities exposures (-$7 million),” Mr Israelstam added.
“Global equities products have typically been the most popular category in Australian ETFs but have now received net outflows for three months in a row as investors preference Australian over global share exposures, presumably due to continued concern over likely recessions in a number of key markets including the US.”
Coming off a quiet April, ASX ETF trading value grew 41 per cent month on month for a total of $9.2 billion, which is the highest level in six months.
May was also busy on the product launch front, with 10 new ETF products hitting the market. JP Morgan launched three active ETFs while Aoris added another, Van Eck launched a US Treasury Bond ETF, iShares introduced Global Property and Global Infrastructure products, and BetaShares expanded its offering with two new products.
Global X had the three best performing products in May, with the Global X FANG+ (FANG) leading the way with a 19.6 per cent gain, followed by its Semiconductor ETF (SEMI), which was up 18.2 per cent, and its Ultra Long Nasdaq 100 Hedge Fund (LNAS) up 18.0 per cent. The Loftus Peak Global Disruption Fund (LPGD) was up 13.7 per cent, with the BetaShares Global Cybersecurity ETF (HACK) rounding out the top five with a 13.3 per cent gain.
“It was very much a month where growth exposures roared back to life, with the best-performing products being tech-themed,” Mr Israelstam said.
“Australian equities on the other hand had negative performance as our reserve bank continued to hike interest rates.”