Australian equities help ETFs report highest inflows in a year

13 September 2023
| By Rhea Nath |
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After global equities saw their “first meaningful monthly inflow” in the past calendar year last month, Australian equities have been quick to follow with some $1.1 billion in inflows in August. 

These included the Vanguard Australian Shares Index ETF which gained $507 million, iShares Core S&P/ ASX 200 ETF which gained $273 million, and BetaShares Australia 200 ETF which gained $162 million.

It marks a departure from previous months when cash and fixed income exposure was popular, BetaShares observed, and represented 50 per cent of the total month’s inflows.

Other popular categories for inflows were Australian fixed income exposures, which attracted the most cash flow of any asset class in the first half of this year, and cash.

These strong monthly flows have resulted in a total market cap increase of $2.5 billion for the Australian ETF industry, while industry funds under management ended the month at $156.1 billion. 

Over the last 12 months, the industry has grown by 20.1 per cent year on year, or $26.1 billion. 

“Investor inflows in the month of August were $2.2 billion, the highest inflows recorded over the last 12 months,” said Ilan Israelstam, BetaShares chief commercial officer.

“With markets more subdued, the net inflows represented ~90 per cent of the industry growth with asset value appreciation making up the remaining 10 per cent.

“ASX ETF trading value grew 8 per cent month on month, with ASX trading value rising above $11 billion for the first time in 15 months and representing the fifth highest monthly value traded on record.”

According to the firm, ETF investors largely chose to hold or add to their positions, in aggregate, though outflows were seen in the subcategories of international equities in Europe, Asia, and emerging markets, and short US equities.

The Magellan Global Fund (Open Class) (Managed Fund) saw the highest outflows of $209 million, followed by the BetaShares FTSE 100 ETF of $92 million, Vanguard Global Value Equity Active ETF (Managed FUND) of $72 million, and Vanguard FTSE Europe Shares ETF of $49 million. 

There were three new ETFs launched in August: two active ETFs from JP Morgan (fixed income and emerging markets), one active ETF from IML (Australian shares), and a new US equities product from Global X. 

Among the top performers in August were the BetaShares Global Uranium ETF (15.8 per cent), Global X Uranium ETF (9.9 per cent), BetaShares Strong US Dollar Fund (9.8 per cent), Global X Physical Platinum (7.4 per cent), and BetaShares US Equities Strong Bear Currency Hedged (5.8 per cent).

Israelstam attributed the strong performance of the BetaShares Global Uranium ETF as a result of a significant volume of long-term uranium purchase contracts being signed combined with concerns over disruptions to supply.
 

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