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ETFs grew by 50% in 2019. Here’s where the money went

Global markets rallied in 2019 and the popularity of ETFs showed no signs of abating. The ETF market in Australia finished the year with $61.5 Billion under management, a phenomenal 52% increase on 2018’s close of $40 Billion. We take a look at where the money went.

By ETF Watch - Jan 13, 2020

After 2018 finished with a whimper, 2019 more than made up for it in the ETF market. Global markets rallied in 2019 and the popularity of ETFs showed no signs of abating. The ETF market in Australia finished the year with $61.5 Billion under management, a phenomenal 52% increase on 2018’s close of $40 Billion.

The growth was through a combination of market returns, with global share markets returning in the vicinity of 20% in 2019, as well as new money inflows. In fact, inflows into ETFs in 2019 doubled that of 2018, with $13.8 Billion of new inflows for the year.

New listings in 2019

2019 started slow, with the first new ETF not launched until the end of March, however the new listings soon started to ramp up, with 21 new ETFs launched in 2019. We’re sure there would have been more, but ASICs temporary ban on Active ETFs saw a number of these get delayed, presumably until early 2020, now that the ban has been lifted.

There’s been a number of interesting new listings this year, including a long overdue FTSE 100 ETF from BetaShares, Australia’s first Crowdsourced ETF from SelfWealth, two India ETFs and late in the year BetaShares new suite of diversified ETFs.

Which sectors dominated flows in 2019?

The last couple of years have seen global shares dominate ETF inflows. That changed in 2019, with Australian Shares marginally back on top. We suspect this is due to the strength of the Australian Market, which has lagged in the last few years but was one of the best performers in 2019.

Fixed income remains popular with ETF investors looking to bolster their returns from their defensive investments. Almost 25% of net flows in 2019 went to  this sector, and there are now 27 fixed income focused ETFs available on the ASX.

Passive continues to dominate

Whilst the popularity of Smart Beta and Actively managed ETFs continues to grow, passive or index ETFs still dominate flows, taking 67% inflows, marginally higher than 2018. This isn’t a surprise to us, with 2019 being a year where the best returns came by simply being invested in the market. With Active managers generally struggling to beat benchmark returns, predictably flows to Active ETFs by percentage dropped in 2019.

Which funds topped inflows in 2019?

2019 showed the importance of fees when it comes to the popularity of ETFs. The two highest inflow ETFs were Vanguard’s Australian Shares (number 1 for second year in a row) and iShares S&P/ASX 200 ETF. Both of these funds reduced their management fees in 2019 in response to pressure from BetaShares and their 2018 launched A200 ETF with fees of just 0.07%pa. The iShares S&P/ASX 200 ETF (IOZ), reduced their management fees to 0.09%pa, 0.01% lower than Vanguard’s 0.10%. Since the fee cut in June inflows to IOZ have skyrocketed to roughly match Australia’s most popular ETF, VAS.

In contrast the previously largest (and oldest) ETF in Australia, SPDR S&P/ASX 200 Fund (STW) whose fees remain stubbornly stuck at twice their competitors at 0.19% pa actually saw a $200 million outflow in 2019, the largest outflow of all ETFs. ETF issuers have been put on notice to keep their fees to a minimum or have investors show them the door.

STW’s fall from grace has seen VAS on its 10th birthday comfortably take the largest ASX listed ETF position off STW in 2019, now boasting around a billion dollars more funds under management than STW, and looking sure to be the first Australian ETF to pass the $5 billion barrier in early 2020.

The remainder of the top inflows in 2019 include many of the familiar names from the likes of Vanguard, iShares and Betashares.

Whilst 22 ETFs recorded inflows of greater than $100 million in 2018, in 2019 the number rose to 39.

Net flows and size of all ASX listed ETFs are shown in the table below.

TickerNameTotal Inflows (millions)Fund Size (Millions)
VASVanguard Australian Shares Index$938.88$4,606.91
IOZiShares S&P/ASX 200 ETF$732.04$1,895.39
VGSVanguard MSCI Index International Series$590.92$2,212.38
VAFVanguard Australian Fixed Interest Index$535.58$1,339.13
AAABetashares Australian High Interest Cash ETF$502.46$1,792.85
VAPVanguard Australian Property Securities Index ETF$462.62$1,703.53
HBRDBetaShares Active Australian Hybrids Fund (managed fund)$450.36$661.51
IAFiShares UBS Composite Bond ETF$409.18$1,096.54
QPONBetaShares Australian Bank Senior Floating Rate Bond ETF$383.45$755.78
MVWVanEck Vectors Australian Equal Weight ETF$361.25$1,103.78
GOLDETFS Physical Gold$339.85$1,122.41
BILLiShares Core Cash ETF$303.37$603.71
MICHMagellan Infrastructure Fund (Currency Hedged) (Managed Fund)$289.07$581.93
CREDBetaShares Australian Investment Grade Corporate Bond ETF$265.61$385.50
VGBVanguard Australian Government Bond Index ETF$246.53$422.36
A200Betashares Australia 200 ETF$246.16$724.38
QUALVanEck Vectors MSCI World Ex-Australia ETF$245.92$848.51
MGEMagellan Global Equities Fund$228.30$1,657.09
VHYVanguard Australian Shares High Yield ETF$224.88$1,382.93
VACFVanguard Australian Corporate Fixed Interest Index ETF$210.07$389.33
VGADVanguard MSCI Index International Series (Hedged)$190.89$773.46
VIFVanguard International Fixed Interest (Hedged) ETF$190.01$437.92
FAIRBetaShares Australian Sustainability Leaders ETF$182.92$425.63
IHEBiShares J.P. Morgan USD Emerging Markets Bond (AUD Hedged) ETF$166.54$180.00
VEUVanguard All-World EX US Shares Index$164.39$1,634.32
VTSVanguard US Total Market Shares Index$155.84$1,874.28
FLOTVaneck Vectors Australian Floating Rate ETF$151.94$306.91
ETHIBetaShares Global Sustainability Leaders ETF$150.36$481.54
VDBAVanguard Diversified Balanced Index ETF$148.48$226.36
VDHGVanguard Diversified High Growth Index ETF$147.24$286.82
XAROActiveX Ardea Real Outcome Bond Fund (Managed Fund)$137.26$138.96
IHCBiShares Global Corporate Bond ETF (Hedged)$136.58$241.29
VSOVanguard MSCI Australian Small Companies Index$129.35$368.28
BBOZBetaShares Australian Equities Strong Bear (Hedge Fund)$127.15$143.56
VDGRVanguard Diversified Growth Index ETF$124.51$215.15
NDQBetashares NASDAQ 100$122.67$664.42
IHHYiShares Global High Yield Bond (Hedged) ETF$114.06$138.34
SELFSelfWealth SMSF Leaders ETF$106.87$104.73
VBNDVanguard Global Aggregate Bond Index (Hedged) ETF$102.19$145.81
F100BetaShares FTSE 100 ETF$97.59$102.13
WVOLiShares Edge MSCI World Minimum Volatility ETF$95.67$136.09
BNDSBetaShares Legg Mason Australian Bond Fund (managed fund)$94.71$125.88
MVAVanEck Vectors Australian Property ETF$91.51$258.32
PMGOLDPerth Mint Gold$90.82$292.11
VGEVanguard FTSE Emerging Markets Shares$89.75$368.17
IFRAVanEck Vectors FTSE Global Infrastructure (Hedged) ETF$89.65$207.98
QAUBetaShares Gold Bullion ETF - Currency Hedged$78.85$166.74
ISECiShares Enhanced Cash ETF$78.72$153.07
BBUSBetashares US Eq Strong Bear Hedged Fund$78.60$94.99
VCFVanguard International Credit Securities Index (Hedged) ETF$77.90$169.15
VBLDVanguard Global Infrastructure Index ETF$76.51$81.08
GDXVanEck Vectors Gold Miners ETF$75.24$201.83
WDIVSPDR S&P Global Dividend Fund$75.09$291.52
IHVViShares S&P 500 AUD Hedged$74.86$268.55
VDCOVanguard Diversified Conservative Index ETF$72.02$101.37
ZYAUETFS S&P/ASX 300 High Yield Plus ETF$70.50$155.14
MOATVaneck Vectors Morningstar Wide Moat ETF$66.35$165.44
VESGVanguard Ethically Conscious International Shares Index Fund$62.95$71.24
VAEVanguard FTSE Asia ex Japan Shares Index ETF$62.76$195.55
IVViShares Core S&P 500$61.01$3,422.37
IWLDiShares Core MSCI World All Cap ETF$60.60$126.64
RARIRussell Australian Responsible Investment ETF$60.42$166.94
IXIiShares Global Consumer Staples ETF$60.32$187.53
IXJiShares Global Healthcare ETF$59.84$678.15
PIXXPlatinum International Fund (Quoted Managed Hedge Fund)$57.60$380.95
IHWLiShares Core MSCI World All Cap (AUD Hedged) ETF$56.17$121.43
DJRESPDR Dow Jones Global Real Estate Fund$55.73$352.08
IHDiShares S&P/ASX Dividend Opportunities Fund ETF$54.88$298.13
QOZBetaShares FTSE RAFI Australia 200 ETF$52.46$295.51
SLFSPDR S&P/ASX 200 Listed Property Fund$50.91$651.64
SUBDVanEck Vectors Australian Subordinated Debt ETF$50.20$50.20
GRNVVanEck Vectors MSCI Australian Sustainable Equity ETF$47.28$57.55
MVOLiShares Edge MSCI Australia Minimum Volatility ETF$47.16$52.45
WDMFiShares Edge MSCI World Multifactor ETF$44.79$255.60
FEMXFidelity Global Emerging Markets Fund (Managed Fund)$44.55$62.62
IAAiShares Asia 50 ETF$43.68$563.45
ASIABetaShares Asia Technology Tigers ETF$43.05$96.08
CNEWVanEck Vectors China New Economy ETF$40.74$57.28
RCBRussell Australian Select Corporate Bond ETF$40.54$231.73
FUELBetaShares Global Energy Companies ETF - Currency Hedged$39.37$74.28
HACKBetaShares Global Cybersecurity ETF$35.97$173.92
RINCBetaShares Legg Mason Real Income Fund (managed fund)$35.43$57.21
EX20BetaShares Australian Ex-20 Portfolio Diversifier ETF$35.38$154.33
WCMQWCM Quality Global Growth Fund (Managed Fund)$34.52$101.43
MHGMagellan Global Equities Fund Currency Hedged (Managed Fund)$34.05$134.04
IJRiShares Core S&P SmallCap 600$31.58$197.60
IOOIShares Global 100 ETF$30.60$1,805.83
SFYSPDR S&P/ASX 50 Fund$30.48$604.36
GBNDBetaShares Sustainability Leaders Diversified Bond ETF - Currency Hedged$29.91$29.81
QLTYBetaShares Global Quality Leaders ETF$27.83$35.32
QREBeta Shares S&P/ASX 200 Resources Sector ETF$27.70$70.03
VISMVanguard MSCI International Small Companies Index ETF$26.25$29.86
TECHETFS Morningstar Global Technology ETF$25.23$114.95
QHALVanEck Vectors MSCI World ex Australia Quality (Hedged) ETF$24.72$26.79
ZYUSETFS S&P 500 High Yield Low Volatility ETF$24.49$85.91
ETPMAGETFS Physical Silver$23.13$97.09
BEARBetaShares Australian Equities Bear (Hedge Fund)$22.66$55.97
IINDBetaShares India Quality ETF$22.18$22.31
AGVTBetaShares Australian Government Bond ETF$22.11$21.94
IEMiShares MSCI Emerging Markets ETF$21.53$698.65
BONDSPDR S&P/ASX Australian Bond Fund$20.85$47.61
VEQVanguard FTSE Europe Shares ETF$19.42$263.46
IJPiShares MSCI Japan ETF$19.10$308.71
INESInvestSMART Ethical Securities Fund (Managed Fund)$17.72$18.71
COREETFS Global Core Infrastructure ETF$17.60$24.47
MVEVanEck Vectors S&P/ASX MidCap ETF$17.23$125.07
PLUSVanEck Vectors Australian Corporate Bond Plus ETF$17.23$276.46
VGMFVanguard Global Multi-Factor Active ETF (Managed Fund)$16.12$17.11
INCMBetaShares Global Income Leaders ETF$15.60$17.81
SYISPDR MSCI Australia Select High Dividend Yield Fund$15.46$171.17
VLCVanguard MSCI Australian Large Companies Index$14.18$104.16
VEFIVanguard Ethically Conscious Global Aggregate Bond Index Fund$14.18$15.25
OZRSPDR S&P/ASX 200 Resources Fund$13.63$98.36
IVEiShares MSCI EAFE ETF$13.55$382.73
REITVanEck Vectors FTSE International Property (Hedged) ETF$12.48$12.49
NDIAETFS Reliance India Nifty 50 ETF$11.73$12.00
EMKTVanEck Vectors MSCI Multifactor Emerging Markets Equity ETF$11.71$32.87
MSTRMorningstar International Shares Active ETF (Managed Fund)$11.57$11.79
GOVTSPDR S&P/ASX Australian Government Bond Fund$11.31$27.98
RBTZBetaShares Global Robotics and Artificial Intelligence ETF$10.55$28.66
DIVUBS IQ Morningstar Australia Dividend Yield ETF$10.51$20.84
OZFSPDR S&P/ASX 200 Financials ex A-REITS Fund$10.49$91.07
RGBRussell Australian Government Bond ETF$10.01$75.13
IKOiShares MSCI South Korea Capped ETF$9.83$72.33
QMIXSPDR MSCI World Quality Mix Fund$9.68$22.63
EMMGBetaShares Legg Mason Emerging Markets Fund (managed fund)$9.04$9.97
VVLUVanguard Global Value Equity Active ETF (Managed Fund)$7.96$21.50
WRLDBetashares Managed Risk Global Share Fund$7.95$69.28
IHOOiShares Global 100 AUD Hedged$7.94$52.37
QUSBetashares FTSE RAFI US 1000 ETF$7.91$51.85
CETFVanEck Vectors ChinaAMC A-Share ETF$7.69$30.02
RDVRussell High Dividend Australian Shares ETF$7.24$287.80
AUSTBetashares Managed Risk Australian Share Fund$7.17$48.28
POUBetaShares British Pound ETF$6.97$25.63
SMLLBetaShares Australian Small Companies Select Fund (managed fund)$6.71$35.49
EINCBetaShares Legg Mason Equity Income Fund (managed fund)$6.69$26.65
MVRVanEck Vectors Australian Resources ETF$5.93$67.49
VMINVanguard Global Minimum Volatility Active ETF (Managed Fund)$5.84$16.65
MNRSBetashares Global Gold Miners ETF - Currency Hedged$5.66$15.01
SAVEPinnacle aShares Global Dynamic Income Fund (Managed Fund)$5.48$5.82
GLINAMP Capital Global Infrastructure Securities Fund (unhedged) (managed fund)$5.29$34.93
ACDCETFS Battery Tech & Lithium ETF$5.24$14.40
CUREETFS S&P Biotech ETF$5.03$6.88
Z3ROPinnacle aShares Dynamic Cash Fund (Managed Fund)$5.00$5.00
MVSVanEck Vectors Small Cap Dividend Payers ETF$4.99$67.71
RENTAMP Capital Global Property Securities Fund (unhedged) (managed fund)$4.91$24.86
UBWUBS IQ MSCI World ex Australia Ethical ETF$4.86$44.47
ISOiShares S&P/ASX Small Ordinaries ETF$4.42$108.54
MVBVanEck Vectors Australian Banks ETF$4.37$45.57
AGX1Antipodes Global Shares (Quoted Managed Fund)$4.11$26.82
SPYSPDR S&P 500 ETF Trust$3.95$35.88
SWTZSwitzer Dividend Growth Fund (Managed Fund)$3.93$82.20
ETPMPTETFS Physical Platinum$3.68$5.70
AUMFiShares Edge MSCI Australia Multifactor ETF$3.67$18.44
UBEUBS IQ MSCI Europe Ethical ETF$3.60$16.54
WXHGSPDR S&P World Ex Australia (Hedged) Fund$3.58$98.91
WEMGSPDR S&P Emerging Markets Fund$3.54$22.81
EIGAeInvest Income Generator Fund (Managed Fund)$3.11$25.09
UMAXBetashares S&P500 Yield Maximiser Fund (Managed Fund)$2.98$101.85
HVSTBetaShares Australian Dividend Harvester Fund (Managed Fund)$2.94$163.66
DGGFBetaShares Diversified Growth ETF$2.53$2.53
DHHFBetaShares Diversified High Growth ETF$2.49$2.49
AUDSBetaShares Strong Australian Dollar Fund (hedge fund)$2.30$4.69
ESGIVanEck Vectors MSCI International Sustainable Equity ETF$1.92$26.93
ZUSDETFS Physical US Dollar ETF$1.90$8.82
IMPQeInvest Future Impact Small Caps Fund (Managed Fund)$1.51$1.21
ETPMPDETFS Physical Palladium$1.39$3.86
YANKBetaShares Strong U.S. Dollar Fund (hedge fund)$1.39$10.14
DBBFBetaShares Diversified Balanced ETF$1.25$1.25
DZZFBetaShares Diversified Conservative Income ETF$1.25$1.25
UBJUBS IQ MSCI Japan Ethical ETF$1.15$6.27
ETPMPMETFS Physical Precious Metal Basket$1.14$10.01
UBPUBS IQ MSCI Asia APREX 50 Ethical ETF$1.02$13.57
RSMRussell Australian Semi-Government Bond ETF $0.94$64.56
MOGLMontgomery Global Equities Fund (Managed Fund)$0.46$97.68
MONYUBS IQ Cash ETF$0.30$1.50
QAGBetaShares Agricultural ETF - Currency Hedged (Synthetic)$0.19$3.19
SSOSPDR S&P/ASX Small Ordinaries Fund$0.05$23.48
UBUUBS IQ MSCI USA Ethical ETF$0.03$8.39
FOODBetaShares Global Agriculture Companies ETF - Currency Hedged-$0.05$20.35
IGBIShares UBS Treasury ETF-$0.10$80.91
QCBBetaShares Commodities Basket ETF - Currency Hedged (Synthetic)-$0.17$8.50
ETFUBS IQ Morningstar Australia Quality ETF-$0.91$8.09
ITWiShares MSCI Taiwan ETF-$1.15$5.65
EEUBetaShares Euro ETF-$1.19$4.84
QFNBeta Shares S&P/ASX 200 Financials Sector ETF-$1.37$33.51
DRUGBetaShares Global Healthcare ETF - Currency Hedged-$1.39$33.37
WXOZSPDR S&P World Ex Australia Fund-$1.57$205.15
PAXXPlatinum Asia Fund (Quoted Managed Hedge Fund)-$2.58$155.08
ILBiShares UBS Government Inflation ETF-$2.92$128.92
IZZiShares China Large-Cap ETF-$3.86$105.11
ILCiShares S&P/ASX 20 ETF-$4.42$316.62
GROWSchroder Real Return Fund (Managed Fund)-$5.09$52.87
OOOBetaShares Crude Oil Index ETF- Currency Hedged (Synthetic)-$6.23$25.37
IJHiShares Core S&P MidCap 400-$6.51$154.07
GGUSBetashares Geared US Equity Fund - Currency Hedged (Hedge Fund)-$6.65$27.69
INIFInvestSMART Australian Equity Income Fund (Managed Fund)-$8.10$31.80
KSMK2 Australian Small Cap Fund-$8.91$15.94
DMKTAMP Capital Dynamic Markets Fund (Hedge Fund)-$9.61$21.10
ESTXETFS EURO STOXX 50® ETF-$11.62$56.25
ROBOETFS ROBO Global Robotics and Automation ETF-$16.74$128.05
UBAUBS IQ MSCI Australia Ethical ETF-$19.67$182.12
YMAXBetaShares Australian Top 20 Equity Yield Maximiser Fund-$19.73$309.99
HEURBetaShares WisdomTree Europe ETF - Currency Hedged-$20.69$27.50
HJPNBetaShares WisdomTree Japan ETF - Currency Hedged-$22.31$37.77
BNKSBetaShares Global Banks ETF - Currency Hedged-$28.50$39.42
GEARBetaShares Geared Australian Equity Fund (Hedge Fund)-$41.09$91.05
USDBetaShares U.S. Dollar ETF-$111.08$253.42
IEUIShares Europe ETF-$147.74$633.02
STWSPDR S&P/ASX 200 Fund-$201.54$3,649.46

Where to for 2020?

If the current bull market continues, we see no slow down in ETF growth, with it not inconceivable to see over $20 billion in new flows in 2020, pushing the Australian ETF market closer to the $100 billion barrier. However, every year the bull market continues brings us a year closer to the end.

Regardless of what happens in 2020, it’s clear that ETFs resonate with investors and now that the represent a significant portion of Australia’s Wealth Management Industry are here to stay for the long term.

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