BetaShares Australian ETF Review: Year End 2015

Alex Vynokur

Alex Vynokur

Multiple industry records were broken in another hallmark year for the Australian exchange traded fund industry, according to BetaShares Australian ETF Review – End of Year Review 2015.

The industry recorded its highest ever annual growth in 2015, with funds under management increasing $6.4 billion (up 42% on 2014) to end the year at a new record high of $21 billion.

Records were also broken for net inflows, trading activity and number of products launched.

In a year when most stock markets remained flat, or even fell, the Australian exchange traded fund industry showed resilience by maintaining steady and consistent net inflows, with almost all (94%) of the growth coming from net inflows. This represents a record of $6 billion in new money, an increase of 40% on the net inflows of 2014 ($4.3 billion).

Comparatively, the percentage growth in net inflow to retail managed funds was 6.6%, with exchange traded funds continuing to significantly outpace the growth of the unlisted managed fund industry .

Trading activity levels also reached record highs, with trading value increasing 61% compared to 2014.

Consistent with previous years, the vast majority of the industry’s net inflows were captured by the top four ranking issuers by net inflows, with iShares, Vanguard, State Street and BetaShares attracting 85% of the industry’s net flows.
Significant product activity resulted in 69 new products launched throughout the year, a dramatic increase on the 12 new products launched in 2014.

Commenting on the record-breaking success of exchange traded funds in 2015, BetaShares managing director Alex Vynokur said: “Last year was a watershed year for the industry, resulting in the breaking of multiple industry records – domestically and globally.

“The global ETF industry grew to US$3 trillion in assets under management. In Australia, the industry reached $21 billion in FUM.

“After several years of appetite for international equities products, in 2015 we saw a more even split between Australian equities and developed market international equities, resulting in $1.7 billion of new money each. Interest in European exposures also grew substantially as investors became more confident in the resolution of the Eurozone crisis, with both trading and inflows into European oriented ETFs increasing markedly compared to previous years.

“High yield products also continued to be popular, with approximately $500m of net inflows in 2015 showing that there is continued demand from investors for income products.

“The best performing exposures for the year were Japanese equities, and global consumer staples, followed by global healthcare.

“We believe the industry will continue to grow strongly next year, and forecast total industry FUM at end 2016 to be in the range of $28 to 30 billion,” said Mr Vynokur.

Strong growth in December 2015

In reference to the final month of 2015, Mr Vynokur said: “December finished strongly with $388 million in FUM growth. December also saw net new money of $345 million, with nine new products launched throughout the month.
“BetaShares Geared Australian Equity Fund (hedge fund) and Property Sector funds were the best performing products throughout the month,” Mr Vynokur concluded.

Click here to download a copy of the Betashares report.

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