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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.
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.
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.
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.
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.
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.
| Ticker | Name | Total Inflows (millions) | Fund Size (Millions) |
|---|---|---|---|
| VAS | Vanguard Australian Shares Index | $938.88 | $4,606.91 |
| IOZ | iShares S&P/ASX 200 ETF | $732.04 | $1,895.39 |
| VGS | Vanguard MSCI Index International Series | $590.92 | $2,212.38 |
| VAF | Vanguard Australian Fixed Interest Index | $535.58 | $1,339.13 |
| AAA | Betashares Australian High Interest Cash ETF | $502.46 | $1,792.85 |
| VAP | Vanguard Australian Property Securities Index ETF | $462.62 | $1,703.53 |
| HBRD | BetaShares Active Australian Hybrids Fund (managed fund) | $450.36 | $661.51 |
| IAF | iShares UBS Composite Bond ETF | $409.18 | $1,096.54 |
| QPON | BetaShares Australian Bank Senior Floating Rate Bond ETF | $383.45 | $755.78 |
| MVW | VanEck Vectors Australian Equal Weight ETF | $361.25 | $1,103.78 |
| GOLD | ETFS Physical Gold | $339.85 | $1,122.41 |
| BILL | iShares Core Cash ETF | $303.37 | $603.71 |
| MICH | Magellan Infrastructure Fund (Currency Hedged) (Managed Fund) | $289.07 | $581.93 |
| CRED | BetaShares Australian Investment Grade Corporate Bond ETF | $265.61 | $385.50 |
| VGB | Vanguard Australian Government Bond Index ETF | $246.53 | $422.36 |
| A200 | Betashares Australia 200 ETF | $246.16 | $724.38 |
| QUAL | VanEck Vectors MSCI World Ex-Australia ETF | $245.92 | $848.51 |
| MGE | Magellan Global Equities Fund | $228.30 | $1,657.09 |
| VHY | Vanguard Australian Shares High Yield ETF | $224.88 | $1,382.93 |
| VACF | Vanguard Australian Corporate Fixed Interest Index ETF | $210.07 | $389.33 |
| VGAD | Vanguard MSCI Index International Series (Hedged) | $190.89 | $773.46 |
| VIF | Vanguard International Fixed Interest (Hedged) ETF | $190.01 | $437.92 |
| FAIR | BetaShares Australian Sustainability Leaders ETF | $182.92 | $425.63 |
| IHEB | iShares J.P. Morgan USD Emerging Markets Bond (AUD Hedged) ETF | $166.54 | $180.00 |
| VEU | Vanguard All-World EX US Shares Index | $164.39 | $1,634.32 |
| VTS | Vanguard US Total Market Shares Index | $155.84 | $1,874.28 |
| FLOT | Vaneck Vectors Australian Floating Rate ETF | $151.94 | $306.91 |
| ETHI | BetaShares Global Sustainability Leaders ETF | $150.36 | $481.54 |
| VDBA | Vanguard Diversified Balanced Index ETF | $148.48 | $226.36 |
| VDHG | Vanguard Diversified High Growth Index ETF | $147.24 | $286.82 |
| XARO | ActiveX Ardea Real Outcome Bond Fund (Managed Fund) | $137.26 | $138.96 |
| IHCB | iShares Global Corporate Bond ETF (Hedged) | $136.58 | $241.29 |
| VSO | Vanguard MSCI Australian Small Companies Index | $129.35 | $368.28 |
| BBOZ | BetaShares Australian Equities Strong Bear (Hedge Fund) | $127.15 | $143.56 |
| VDGR | Vanguard Diversified Growth Index ETF | $124.51 | $215.15 |
| NDQ | Betashares NASDAQ 100 | $122.67 | $664.42 |
| IHHY | iShares Global High Yield Bond (Hedged) ETF | $114.06 | $138.34 |
| SELF | SelfWealth SMSF Leaders ETF | $106.87 | $104.73 |
| VBND | Vanguard Global Aggregate Bond Index (Hedged) ETF | $102.19 | $145.81 |
| F100 | BetaShares FTSE 100 ETF | $97.59 | $102.13 |
| WVOL | iShares Edge MSCI World Minimum Volatility ETF | $95.67 | $136.09 |
| BNDS | BetaShares Legg Mason Australian Bond Fund (managed fund) | $94.71 | $125.88 |
| MVA | VanEck Vectors Australian Property ETF | $91.51 | $258.32 |
| PMGOLD | Perth Mint Gold | $90.82 | $292.11 |
| VGE | Vanguard FTSE Emerging Markets Shares | $89.75 | $368.17 |
| IFRA | VanEck Vectors FTSE Global Infrastructure (Hedged) ETF | $89.65 | $207.98 |
| QAU | BetaShares Gold Bullion ETF - Currency Hedged | $78.85 | $166.74 |
| ISEC | iShares Enhanced Cash ETF | $78.72 | $153.07 |
| BBUS | Betashares US Eq Strong Bear Hedged Fund | $78.60 | $94.99 |
| VCF | Vanguard International Credit Securities Index (Hedged) ETF | $77.90 | $169.15 |
| VBLD | Vanguard Global Infrastructure Index ETF | $76.51 | $81.08 |
| GDX | VanEck Vectors Gold Miners ETF | $75.24 | $201.83 |
| WDIV | SPDR S&P Global Dividend Fund | $75.09 | $291.52 |
| IHVV | iShares S&P 500 AUD Hedged | $74.86 | $268.55 |
| VDCO | Vanguard Diversified Conservative Index ETF | $72.02 | $101.37 |
| ZYAU | ETFS S&P/ASX 300 High Yield Plus ETF | $70.50 | $155.14 |
| MOAT | Vaneck Vectors Morningstar Wide Moat ETF | $66.35 | $165.44 |
| VESG | Vanguard Ethically Conscious International Shares Index Fund | $62.95 | $71.24 |
| VAE | Vanguard FTSE Asia ex Japan Shares Index ETF | $62.76 | $195.55 |
| IVV | iShares Core S&P 500 | $61.01 | $3,422.37 |
| IWLD | iShares Core MSCI World All Cap ETF | $60.60 | $126.64 |
| RARI | Russell Australian Responsible Investment ETF | $60.42 | $166.94 |
| IXI | iShares Global Consumer Staples ETF | $60.32 | $187.53 |
| IXJ | iShares Global Healthcare ETF | $59.84 | $678.15 |
| PIXX | Platinum International Fund (Quoted Managed Hedge Fund) | $57.60 | $380.95 |
| IHWL | iShares Core MSCI World All Cap (AUD Hedged) ETF | $56.17 | $121.43 |
| DJRE | SPDR Dow Jones Global Real Estate Fund | $55.73 | $352.08 |
| IHD | iShares S&P/ASX Dividend Opportunities Fund ETF | $54.88 | $298.13 |
| QOZ | BetaShares FTSE RAFI Australia 200 ETF | $52.46 | $295.51 |
| SLF | SPDR S&P/ASX 200 Listed Property Fund | $50.91 | $651.64 |
| SUBD | VanEck Vectors Australian Subordinated Debt ETF | $50.20 | $50.20 |
| GRNV | VanEck Vectors MSCI Australian Sustainable Equity ETF | $47.28 | $57.55 |
| MVOL | iShares Edge MSCI Australia Minimum Volatility ETF | $47.16 | $52.45 |
| WDMF | iShares Edge MSCI World Multifactor ETF | $44.79 | $255.60 |
| FEMX | Fidelity Global Emerging Markets Fund (Managed Fund) | $44.55 | $62.62 |
| IAA | iShares Asia 50 ETF | $43.68 | $563.45 |
| ASIA | BetaShares Asia Technology Tigers ETF | $43.05 | $96.08 |
| CNEW | VanEck Vectors China New Economy ETF | $40.74 | $57.28 |
| RCB | Russell Australian Select Corporate Bond ETF | $40.54 | $231.73 |
| FUEL | BetaShares Global Energy Companies ETF - Currency Hedged | $39.37 | $74.28 |
| HACK | BetaShares Global Cybersecurity ETF | $35.97 | $173.92 |
| RINC | BetaShares Legg Mason Real Income Fund (managed fund) | $35.43 | $57.21 |
| EX20 | BetaShares Australian Ex-20 Portfolio Diversifier ETF | $35.38 | $154.33 |
| WCMQ | WCM Quality Global Growth Fund (Managed Fund) | $34.52 | $101.43 |
| MHG | Magellan Global Equities Fund Currency Hedged (Managed Fund) | $34.05 | $134.04 |
| IJR | iShares Core S&P SmallCap 600 | $31.58 | $197.60 |
| IOO | IShares Global 100 ETF | $30.60 | $1,805.83 |
| SFY | SPDR S&P/ASX 50 Fund | $30.48 | $604.36 |
| GBND | BetaShares Sustainability Leaders Diversified Bond ETF - Currency Hedged | $29.91 | $29.81 |
| QLTY | BetaShares Global Quality Leaders ETF | $27.83 | $35.32 |
| QRE | Beta Shares S&P/ASX 200 Resources Sector ETF | $27.70 | $70.03 |
| VISM | Vanguard MSCI International Small Companies Index ETF | $26.25 | $29.86 |
| TECH | ETFS Morningstar Global Technology ETF | $25.23 | $114.95 |
| QHAL | VanEck Vectors MSCI World ex Australia Quality (Hedged) ETF | $24.72 | $26.79 |
| ZYUS | ETFS S&P 500 High Yield Low Volatility ETF | $24.49 | $85.91 |
| ETPMAG | ETFS Physical Silver | $23.13 | $97.09 |
| BEAR | BetaShares Australian Equities Bear (Hedge Fund) | $22.66 | $55.97 |
| IIND | BetaShares India Quality ETF | $22.18 | $22.31 |
| AGVT | BetaShares Australian Government Bond ETF | $22.11 | $21.94 |
| IEM | iShares MSCI Emerging Markets ETF | $21.53 | $698.65 |
| BOND | SPDR S&P/ASX Australian Bond Fund | $20.85 | $47.61 |
| VEQ | Vanguard FTSE Europe Shares ETF | $19.42 | $263.46 |
| IJP | iShares MSCI Japan ETF | $19.10 | $308.71 |
| INES | InvestSMART Ethical Securities Fund (Managed Fund) | $17.72 | $18.71 |
| CORE | ETFS Global Core Infrastructure ETF | $17.60 | $24.47 |
| MVE | VanEck Vectors S&P/ASX MidCap ETF | $17.23 | $125.07 |
| PLUS | VanEck Vectors Australian Corporate Bond Plus ETF | $17.23 | $276.46 |
| VGMF | Vanguard Global Multi-Factor Active ETF (Managed Fund) | $16.12 | $17.11 |
| INCM | BetaShares Global Income Leaders ETF | $15.60 | $17.81 |
| SYI | SPDR MSCI Australia Select High Dividend Yield Fund | $15.46 | $171.17 |
| VLC | Vanguard MSCI Australian Large Companies Index | $14.18 | $104.16 |
| VEFI | Vanguard Ethically Conscious Global Aggregate Bond Index Fund | $14.18 | $15.25 |
| OZR | SPDR S&P/ASX 200 Resources Fund | $13.63 | $98.36 |
| IVE | iShares MSCI EAFE ETF | $13.55 | $382.73 |
| REIT | VanEck Vectors FTSE International Property (Hedged) ETF | $12.48 | $12.49 |
| NDIA | ETFS Reliance India Nifty 50 ETF | $11.73 | $12.00 |
| EMKT | VanEck Vectors MSCI Multifactor Emerging Markets Equity ETF | $11.71 | $32.87 |
| MSTR | Morningstar International Shares Active ETF (Managed Fund) | $11.57 | $11.79 |
| GOVT | SPDR S&P/ASX Australian Government Bond Fund | $11.31 | $27.98 |
| RBTZ | BetaShares Global Robotics and Artificial Intelligence ETF | $10.55 | $28.66 |
| DIV | UBS IQ Morningstar Australia Dividend Yield ETF | $10.51 | $20.84 |
| OZF | SPDR S&P/ASX 200 Financials ex A-REITS Fund | $10.49 | $91.07 |
| RGB | Russell Australian Government Bond ETF | $10.01 | $75.13 |
| IKO | iShares MSCI South Korea Capped ETF | $9.83 | $72.33 |
| QMIX | SPDR MSCI World Quality Mix Fund | $9.68 | $22.63 |
| EMMG | BetaShares Legg Mason Emerging Markets Fund (managed fund) | $9.04 | $9.97 |
| VVLU | Vanguard Global Value Equity Active ETF (Managed Fund) | $7.96 | $21.50 |
| WRLD | Betashares Managed Risk Global Share Fund | $7.95 | $69.28 |
| IHOO | iShares Global 100 AUD Hedged | $7.94 | $52.37 |
| QUS | Betashares FTSE RAFI US 1000 ETF | $7.91 | $51.85 |
| CETF | VanEck Vectors ChinaAMC A-Share ETF | $7.69 | $30.02 |
| RDV | Russell High Dividend Australian Shares ETF | $7.24 | $287.80 |
| AUST | Betashares Managed Risk Australian Share Fund | $7.17 | $48.28 |
| POU | BetaShares British Pound ETF | $6.97 | $25.63 |
| SMLL | BetaShares Australian Small Companies Select Fund (managed fund) | $6.71 | $35.49 |
| EINC | BetaShares Legg Mason Equity Income Fund (managed fund) | $6.69 | $26.65 |
| MVR | VanEck Vectors Australian Resources ETF | $5.93 | $67.49 |
| VMIN | Vanguard Global Minimum Volatility Active ETF (Managed Fund) | $5.84 | $16.65 |
| MNRS | Betashares Global Gold Miners ETF - Currency Hedged | $5.66 | $15.01 |
| SAVE | Pinnacle aShares Global Dynamic Income Fund (Managed Fund) | $5.48 | $5.82 |
| GLIN | AMP Capital Global Infrastructure Securities Fund (unhedged) (managed fund) | $5.29 | $34.93 |
| ACDC | ETFS Battery Tech & Lithium ETF | $5.24 | $14.40 |
| CURE | ETFS S&P Biotech ETF | $5.03 | $6.88 |
| Z3RO | Pinnacle aShares Dynamic Cash Fund (Managed Fund) | $5.00 | $5.00 |
| MVS | VanEck Vectors Small Cap Dividend Payers ETF | $4.99 | $67.71 |
| RENT | AMP Capital Global Property Securities Fund (unhedged) (managed fund) | $4.91 | $24.86 |
| UBW | UBS IQ MSCI World ex Australia Ethical ETF | $4.86 | $44.47 |
| ISO | iShares S&P/ASX Small Ordinaries ETF | $4.42 | $108.54 |
| MVB | VanEck Vectors Australian Banks ETF | $4.37 | $45.57 |
| AGX1 | Antipodes Global Shares (Quoted Managed Fund) | $4.11 | $26.82 |
| SPY | SPDR S&P 500 ETF Trust | $3.95 | $35.88 |
| SWTZ | Switzer Dividend Growth Fund (Managed Fund) | $3.93 | $82.20 |
| ETPMPT | ETFS Physical Platinum | $3.68 | $5.70 |
| AUMF | iShares Edge MSCI Australia Multifactor ETF | $3.67 | $18.44 |
| UBE | UBS IQ MSCI Europe Ethical ETF | $3.60 | $16.54 |
| WXHG | SPDR S&P World Ex Australia (Hedged) Fund | $3.58 | $98.91 |
| WEMG | SPDR S&P Emerging Markets Fund | $3.54 | $22.81 |
| EIGA | eInvest Income Generator Fund (Managed Fund) | $3.11 | $25.09 |
| UMAX | Betashares S&P500 Yield Maximiser Fund (Managed Fund) | $2.98 | $101.85 |
| HVST | BetaShares Australian Dividend Harvester Fund (Managed Fund) | $2.94 | $163.66 |
| DGGF | BetaShares Diversified Growth ETF | $2.53 | $2.53 |
| DHHF | BetaShares Diversified High Growth ETF | $2.49 | $2.49 |
| AUDS | BetaShares Strong Australian Dollar Fund (hedge fund) | $2.30 | $4.69 |
| ESGI | VanEck Vectors MSCI International Sustainable Equity ETF | $1.92 | $26.93 |
| ZUSD | ETFS Physical US Dollar ETF | $1.90 | $8.82 |
| IMPQ | eInvest Future Impact Small Caps Fund (Managed Fund) | $1.51 | $1.21 |
| ETPMPD | ETFS Physical Palladium | $1.39 | $3.86 |
| YANK | BetaShares Strong U.S. Dollar Fund (hedge fund) | $1.39 | $10.14 |
| DBBF | BetaShares Diversified Balanced ETF | $1.25 | $1.25 |
| DZZF | BetaShares Diversified Conservative Income ETF | $1.25 | $1.25 |
| UBJ | UBS IQ MSCI Japan Ethical ETF | $1.15 | $6.27 |
| ETPMPM | ETFS Physical Precious Metal Basket | $1.14 | $10.01 |
| UBP | UBS IQ MSCI Asia APREX 50 Ethical ETF | $1.02 | $13.57 |
| RSM | Russell Australian Semi-Government Bond ETF | $0.94 | $64.56 |
| MOGL | Montgomery Global Equities Fund (Managed Fund) | $0.46 | $97.68 |
| MONY | UBS IQ Cash ETF | $0.30 | $1.50 |
| QAG | BetaShares Agricultural ETF - Currency Hedged (Synthetic) | $0.19 | $3.19 |
| SSO | SPDR S&P/ASX Small Ordinaries Fund | $0.05 | $23.48 |
| UBU | UBS IQ MSCI USA Ethical ETF | $0.03 | $8.39 |
| FOOD | BetaShares Global Agriculture Companies ETF - Currency Hedged | -$0.05 | $20.35 |
| IGB | IShares UBS Treasury ETF | -$0.10 | $80.91 |
| QCB | BetaShares Commodities Basket ETF - Currency Hedged (Synthetic) | -$0.17 | $8.50 |
| ETF | UBS IQ Morningstar Australia Quality ETF | -$0.91 | $8.09 |
| ITW | iShares MSCI Taiwan ETF | -$1.15 | $5.65 |
| EEU | BetaShares Euro ETF | -$1.19 | $4.84 |
| QFN | Beta Shares S&P/ASX 200 Financials Sector ETF | -$1.37 | $33.51 |
| DRUG | BetaShares Global Healthcare ETF - Currency Hedged | -$1.39 | $33.37 |
| WXOZ | SPDR S&P World Ex Australia Fund | -$1.57 | $205.15 |
| PAXX | Platinum Asia Fund (Quoted Managed Hedge Fund) | -$2.58 | $155.08 |
| ILB | iShares UBS Government Inflation ETF | -$2.92 | $128.92 |
| IZZ | iShares China Large-Cap ETF | -$3.86 | $105.11 |
| ILC | iShares S&P/ASX 20 ETF | -$4.42 | $316.62 |
| GROW | Schroder Real Return Fund (Managed Fund) | -$5.09 | $52.87 |
| OOO | BetaShares Crude Oil Index ETF- Currency Hedged (Synthetic) | -$6.23 | $25.37 |
| IJH | iShares Core S&P MidCap 400 | -$6.51 | $154.07 |
| GGUS | Betashares Geared US Equity Fund - Currency Hedged (Hedge Fund) | -$6.65 | $27.69 |
| INIF | InvestSMART Australian Equity Income Fund (Managed Fund) | -$8.10 | $31.80 |
| KSM | K2 Australian Small Cap Fund | -$8.91 | $15.94 |
| DMKT | AMP Capital Dynamic Markets Fund (Hedge Fund) | -$9.61 | $21.10 |
| ESTX | ETFS EURO STOXX 50® ETF | -$11.62 | $56.25 |
| ROBO | ETFS ROBO Global Robotics and Automation ETF | -$16.74 | $128.05 |
| UBA | UBS IQ MSCI Australia Ethical ETF | -$19.67 | $182.12 |
| YMAX | BetaShares Australian Top 20 Equity Yield Maximiser Fund | -$19.73 | $309.99 |
| HEUR | BetaShares WisdomTree Europe ETF - Currency Hedged | -$20.69 | $27.50 |
| HJPN | BetaShares WisdomTree Japan ETF - Currency Hedged | -$22.31 | $37.77 |
| BNKS | BetaShares Global Banks ETF - Currency Hedged | -$28.50 | $39.42 |
| GEAR | BetaShares Geared Australian Equity Fund (Hedge Fund) | -$41.09 | $91.05 |
| USD | BetaShares U.S. Dollar ETF | -$111.08 | $253.42 |
| IEU | IShares Europe ETF | -$147.74 | $633.02 |
| STW | SPDR S&P/ASX 200 Fund | -$201.54 | $3,649.46 |
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.
