BetaShares upgrades ETF growth forecast

BetaShares has upgraded its forecast for total assets under management (AUM) in exchange traded funds (ETFs) after it grew by 22% in the first half of 2021.  

The firm had previously forecast that AUM would be between $110 billion and $120 billion by the end of the 2021 but it had already reached $115.7 billion by the end of the first half of the year.  

BetaShares said assets had “increased rapidly” during the six months, from a combination of net flows and asset value appreciation. While assets had increased overall, the volume which came from net flows decreased from the previous six months at $8.8 billion compared to $14 billion. 

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“With strong sharemarket performance as a tail-wind we saw industry funds under management increase rapidly,” it said.  

“We saw Australian ETF industry growth of 22% for the half, to end the financial year at $115.7 billion, an all-time high. 

“Industry FUM grew ~$20 billion in the first half of the year, just under half of which came from net flows, and the remainder from asset value appreciation.” 

This led BetaShares to upgrade its annual forecast as it felt it had previously “been too conservative” in its earlier forecasts. 

“At the end of 2020 (when the industry was $95 billion) we forecast the industry to end 2021 at $110 billion to $120 billion,” it said. 

“It appears as though our forecasts were too conservative and are now revising our forecast upward and expecting total industry FUM at end 2021 to be in the range of $132 billion to $138 billion.” 

The concentration of assets also increased with the volume of assets held by Vanguard and BetaShares rising from 53% of the market to 65%. 

Three Vanguard funds saw the highest inflows during the period; Vanguard Australian Shares Index ETFVanguard MSCI Index International Shares ETF and Vanguard Diversified High Growth Index ETF with flows of $763 million, $400 million and $389 million respectively.  

Magellan Global  saw the highest outflows during the period at $320 million, although it remained the largest ETF available in Australia at $14.6 billion. 

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