BetaShares Half Year 2016 Australian ETF Review: ETF industry growth steadies in the first half

Alex Vynokur

The Australian exchange traded fund industry has expanded during the first half of 2016, recording assets of $22.5 billion at the end of June, according to the BetaShares Australian ETF Half Year Review.

FUM grew 5% in the six months to June 2016, adding $1.1 billion to the industry. By comparison, unit growth increased 15% during the same period, adding $1.4 billion of net new money to the industry. In aggregate, asset prices declined over the period, which acted as a drag on the pace of growth.

Industry growth over the 12 months to 30 June 2016 for the Australian ETF industry was faster, increasing 21.8%, with total FUM increasing $4 billion.

Product development has been relatively strong, with 16 new products launched so far this year, including new active exchange traded managed funds. 10 products were closed, as maturation of the Australian ETF industry continues.

At a category level, investors were particularly drawn to international equities. Over $440 million, or 31.4% of the total net inflows, were allocated into these products in the first half of the year.

Gold exposures registered the best performance (through both physical gold bullion and gold miners) during the half-year period.

“ETFs are known to be low cost, transparent and flexible investments which investors may use in different scenarios. Gold ETFs, for example, attracted safe haven buying recently, especially when market volatility increased during the last part of the quarter,” said BetaShares Managing Director, Alex Vynokur.

“Naturally, market conditions will be a significant factor for the pace of industry growth over the coming six months, but we continue to expect strong structural growth for the industry, and continued net inflows. We also expect a significant number of new products to be launched in the Australian market in the second half of the year,” Mr Vynokur added.

Click here to download a copy of the BetaShares Australian ETF Review – Half Year 2016.