The Vanguard Australian Shares Index ETF (VAS) was ranked as the largest ETF in Australia for the second year in a row, with a market cap of $14.4 billion as at the end of 2023.
According to data published by BetaShares as part of its Australian ETF review for 2023, VAS received $1.53 billion in inflows last year, surpassing the runner up by almost half a billion.
The Vanguard MSCI Index International Shares ETF (VGS) came in second, with a market cap of $6.5 billion, while the iShares S&P 500 ETF (IVV) followed closely behind with $6.5 billion – both funds jumped up one spot from last year.
However, Betashares chief commercial officer Ilan Israelstam noted: “There was a bit of jostling in position year on year amongst the top 10 largest products”.
Namely, the Magellan Global Fund (Open Class) (Managed Fund) (MGOC), which came second in 2022, fell to fourth place with a market cap of $6.1 billion, and experienced outflows of $2.5 billion.
Following MGOC was the SPDR S&P/ASX 200 (STW), which remained in fifth with a market cap of $4.9 billion, while new entrant Dimensional Australian Core Equity Trust (DACE) came in sixth ($4.85 billion). The latter’s success, Betashares said, could be attributed to DACE being converted to an active ETF this year.
In 2023, both the iShares Core S&P/ASX 200 ETF (IOZ) and the VanEck MSCI World Ex-Australian Quality ETF (QUAL) fell down one spot to seventh ($4.83 billion) and eighth ($4.47 billion), respectively.
Rounding out the top 10 were two new entrants – the Betashares Australia 200 ETF (A200) coming in ninth ($3.98 billion), and the Nasdaq 100 ETF (NDQ) at 10th ($3.78 billion).
In terms of inflows received over the year, A200 came in second with $1.07 billion, ahead of IOZ with $947.2 million, Talaria Global Equity Fund (Managed Fund) (TLRA) with $890 million, and the VanEck Australian Subordinated Debt ETF (SUBD) with $770.1 million.
After Magellan, Hyperion Global Growth Companies Fund (Managed Fund) (HYGG) received the next largest outflows of $282.2 million, followed by the iShares S&P Europe ETF (IEU) on $261.7 million, Vanguard Global Value Equity Active ETF (Managed Fund) (VVLU) with $261.6 million, and the Global X Physical Gold (GOLD) on $249.6 million.
“Investors retreated to core allocations in 2023, given market volatility, with the largest flows going to the three largest broad Australian Equity ETFs (VAS, A200, and IOZ),” Mr Israelstam commented.
“Fixed Income products also experienced strong inflows, with four of the largest 10 products for inflows being in the cash and fixed income category,” he added.
“Notably, seven of the top 10 funds for net outflows were active ETFs, with Magellan’s MGOC fund receiving net redemptions every month of the year for a total of $2.5 billion as well as meaningful outflows in their other active ETFs.”
Top performers
The Betashares Crypto Innovators ETF (CRYP) took the number one slot for performance in 2023, with total returns of 214.5 per cent.
“After a particularly strong second half, it was growth exposures that topped the performance tables in the ETF industry in 2023,” Mr Israelstam said.
“This was followed by other crypto and technology exposures.”
This might have been unsurprising for some after the Securities and Exchange Commission (SEC) recently announced the approval for the listing and trading of several spot bitcoin exchange-traded product (ETP) shares, while anticipation of the move having pushed up the price of bitcoin in recent months.
While Betashares came in first for performance in 2023, Global X still had a significant claim over the top performing products.
Namely, second to sixth place comprised Global X’s 21 Shares Bitcoin ETC (150.9 per cent), its Ultra Long Nasdaq 100 Hedge Fund (134.9 per cent), FANG+ ETF (94.4 per cent), 21 Shares Ethereum ETF (91 per cent), and Semiconductor ETF (69.7 per cent).
As part of its end of year review, BetaShares forecast that the total FUM of the Australian ETF industry will exceed $200 billion at the end of this year, with the potential to reach $220 billion depending on market conditions.
