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ETF inflows jump 60 per cent in 2012

Samantha Hodge  |  15 Jan 2013Text size  Decrease  Increase  |  

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Samantha Hodge is a journalist with InvestorDaily, a Sterling publication.


Sharp growth seen in the Australian exchange-traded fund (ETF) market in 2012 is expected to continue over the next 12 months, according to BetaShares' Australian Exchange-Traded Fund Review for 2012.

ETF inflows grew by 60 per cent for the year to $850 million, while funds under management (FUM) increased by 31 per cent to a record high of $6.4 billion.

Twenty-five new products were launched during the year, representing a 40 per cent increase in the number of products available to investors.

"The fund which captured the largest amount of money in Australia was the cash ETF followed by various high-yield equity products, which exemplifies the continued investor demand for yield within more familiar asset classes," BetaShares head of investment strategy Drew Corbett said.

BetaShares, iShares and Vanguard were the top three product issuers in terms of net inflows for the year.

Corbett explained that further growth in the ETF market could be expected over the next 12 months.

"If financial markets remain buoyant, we could see the Australian exchange-traded funds market with $9 billion in assets under management at the end of 2013 and $12 billion by 2014," he said.

"Also, while the industry remains highly competitive, we expect one to two new ETF issuers may enter the market this year."

In December 2012, data from Plan For Life also revealed that the Australian ETF and exchange-traded commodities (ETC) market grew by 16 per cent to $5.8 billion in the 12 months to September 2012.

State Street is still the dominant provider, with close to half of the market (up $150 million to $2.7 billion), but iShares, Vanguard and BetaShares each saw strong growth from a lower base.

iShares grew by a third to $1.34 billion and now controls 23 per cent of the market. While Vanguard ETFs grew by 55 per cent to $500 million, the company remains the fourth-largest provider after ETF securities (down 1.2 per cent to $745 million).

BetaShares doubled its ETF FUM to $266 million and is now the fifth-largest ETF provider in Australia.