The Australian ETF industry grew by 13.1 per cent or $19.6 billion in November, according to the latest Betashares Australian ETF Review, to hit a new all-time high of $169.7 billion.
Betashares attributed the rapid growth to a “triple threat” of large unlisted-to-active ETF conversions, asset value appreciation and strong net inflows observed during the month.
“At least $10 billion (50 per cent) of the growth this month came from conversions of existing unlisted active funds into active ETFs as several new issuers joined the industry,” said Betashares chief commercial officer Ilan Israelstam.
“Strong asset value appreciation, particularly in global equities exposures, and net inflows contributed the remainder of the growth.”
Excluding conversions, some $2.1 billion of net inflows were recorded over the month, which Betashares indicated is the second-highest month of net flows so far this year.
Notably, Betashares recorded its strongest month of net inflows since the firm’s inception in 2009, with approximately $1.4 billion of net flows throughout November.
Overall, the assets under management of the local ETF industry has grown by 24.7 per cent or $33.6 billion over the past 12 months.
“In a meaningful departure from the trend observed throughout 2023, strong performance and reduced concerns over meaningful future interest rate rises led global equities exposures to be the most popular category for investors in November, with ~$955 million of net inflows (45 per cent of total net flows for the month),” said Mr Israelstam.
Australian equities ($589 million) was the next most popular category, followed by fixed income ($408 million), cash ($102 million) and listed property ($49 million).
A total of 15 new funds were launched during November, more than any other previous month. Dimensional and Macquarie both debuted their first active ETFs in Australia.
Other new products included the iShares Physical Gold ETF, currency hedged versions of VanEck ETFs and the Betashares Global Cash Flow Kings ETF.
November’s best performing product was the Global X Ultra Long Nasdaq 100 Hedge Fund (LNAS) with a gain of 24.9 per cent, followed by the Betashares Geared US Equity Fund Currency Hedged (Hedge Fund) (GGUS), which was up by 23.1 per cent.
Other top performers included the Betashares Future of Payments ETF (IPAY), which rose 17.5 per cent, the Betashares Crypto Innovators ETF (CRYP), which lifted 16.6 per cent, and the VanEck Global Listed Private Equity ETF (GPWQ), which gained 13.1 per cent.
Meanwhile, in what Mr Israelstam described as a “sign of the increasing maturity of the industry”, multiple institutional allocations to ETFs were observed last month, led by a $300 million allocation to the Betashares Hedged Global Shares ETF (HGBL).
“Large institutional flows into ETFs are commonplace in more mature markets like the US, and we expect this trend to continue and accelerate in the local market over time,” Mr Israelstam concluded.
