Australian exchange-traded funds (ETFs) have seen $4.8 billion in net inflows since the start of 2023 and total funds under management are expected to cross $160 billion by the end of the year, according to research.
Betashares’ analysis of recent data released by the ASX and CBOE revealed the Australian ETF industry reached $150 billion in funds under management during June 2023.
Net flows in the first half of the year were relatively strong, though it was still 20 per cent less compared to the same period last year, which saw $6.2 billion in net flows.
Fixed income, led by Australian bond products, came out on top as the most popular category, receiving $2.5 billion in net inflows so far this year. This was followed by Australian equities ($1.6 billion) and cash ($688 million).
Overall, nearly half of all investor assets ($74.6 billion) are held in international equities exposures across the ETF industry.
Betashares chief executive, Alex Vynokur, observed that ETFs “continue to cement their place in the portfolios of Australian investors”.
“This trend has pushed ETFs to $150 billion and is expected to facilitate continued growth for the industry for the foreseeable future,” Vynokur said.
“Over the past 20 years, ETFs have allowed investors to improve outcomes right across their portfolio, whether it’s shifting from higher cost unlisted funds, replacing underperforming active managers, or improving diversification beyond the selection of single stocks.”
Among ETF providers, Betashares recorded the largest level of net inflows in the industry in the half year to 30 June with ~$1.8 billion of net inflows, followed by Vanguard at ~$1.5 billion and iShares at ~$1.1 billion.
Collectively, they accounted for some 92 per cent of the industry’s flows so far this year.
Betashares Crypto Innovators ETF took the number one slot for half-year performance, with a total return of 121.3 per cent.
The top five performers in the first half of 2023 were rounded up by other crypto and technology exposures: Global X Ultra Long Nasdaq 100 Hedge Fund (100.5 per cent), Global X 21Shares Bitcoin ETF (84 per cent), Global X FANG+ ETF (77 per cent), and Global X 21Shares Ethereum ETF (56 per cent).
Since inception of the ETF industry in November 2001, it has seen a compound annual growth rate of 43 per cent per annum.
