The funds under management (FUM) of Australia’s ETF industry rose 2.4 per cent or $3.4 billion in April to a record $146 billion, according to the latest BetaShares Australian ETF Review.
This marked the fourth record-setting month for the local ETF industry so far this year, after reaching $138.5 billion in January, $139.7 billion in February and $142.6 billion in March.
BetaShares said that April’s growth came primarily from asset value appreciation on the back of the strong rise seen in global share markets during the month. Investor flows remained positive at $0.8 billion and accounted for 24 per cent of the total monthly growth.
“We once again saw fixed income exposures lead the way in terms of flows with the category recording the highest level of net flows this month ($371 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 $289 million of inflows for the month, followed by the categories of cash ($86 million), short ($60 million) and listed property ($31 million).
“In terms of category outflows, we once again saw (limited) outflows in global equities exposures (-$37 million),” Mr Israelstam added.
“As we remarked last month, global equities ETFs have had a particularly slow start to the year, compared to previous years, with very little inflows recorded in the year to date in what is typically the most popular category in the industry.”
ASX ETF trading value was reported to have fallen to its lowest level since January 2021 amid Easter and the April holiday period, down by 42 per cent to $6.5 billion.
Two new products were launched during the month: the Global X USD Corporate Bond ETF (Currency Hedged) (USIG) and the Global X Australia ex Financial & Resources ETF (OZXX).
The Global X Physical Platinum (ETPMPT) was April’s best performing product with a 10.9 per cent gain, followed by the BetaShares Crypto Innovators ETF (CRYP), which rose by 9.8 per cent, and the Monash Absolute Active Trust (Hedge Fund) (MAAT), which lifted 8.0 per cent.
‘Dual class’ active ETFs
As part of its latest review, BetaShares also shone a spotlight on “dual class” active ETFs following the recent introduction of more detailed information from the ASX.
“Since mid-2020, a number of active investment managers have ‘converted’ existing unlisted funds into dual class active ETFs, a structure which allows investors to buy/sell units in the fund either via the exchange or using the traditional unlisted fund application/redemption process,” Mr Israelstam explained.
“The new data highlights the extent to which assets in these dual-class products have been gathered via the traditional unlisted funds versus investors buying on exchange.”
According to the analysis, only 20 per cent of assets in dual-class active ETFs are held on CHESS, with the remaining 80 per cent being held via the traditional unlisted unit class.
Additionally, BetaShares’ analysis determined that newly launched active ETFs have gathered 75 per cent more CHESS-sponsored assets when compared to these dual-class products.
“To us, this data illustrates that simply launching or converting a fund to be ‘on-exchange’ is no guarantee of asset gathering success in the ETF form and may further indicate the importance of the specialised style of distribution/marketing of ETFs versus the more traditional distribution strategies of unlisted managed funds,” said Mr Israelstam.
