When the ETF market closed in on $40 billion last financial year, we knew it was only a matter of time until the $50 billion milestone was hit. Rounding out the 2019 Financial Year, the milestone was hit last month, with the Australian ETF market closing at $50.59 billion, adding 30% in size from the previous year, a trend that has continued for a number of years now.

The majority of the last year’s growth came from new inflows, with $8.4 billion coming from new flows, up from $7.4 billion last year and $5.2 billion the year prior. Below we take a look at which funds saw the majority of these flows and share some insights that they bring.

Lower cost = more popular

Not surprisingly, the three most popular funds by flows over the last year are three of the lowest costs ETFs available to investors, with relative newcomer and fee disruptor Betashares Australia 200 ETF (A200), who offers access to the broad Australian sharemarket for 0.07% pa rocketing up the leaderboard with over $400 million in flows just over a year from initially launching.

Perennial favourite, Vanguard Australian Shares Fund (VAS) continued to take the number one spot, with almost $800 million in flows. Already offering low fees, Vanguard has recently lowered its fees from 0.14% to 0.10% pa due to pressure from Betashares super low cost option.

Fixed income grows in popularity

As cash rates continue to be slashed to record lows, fixed income ETFs are becoming a popular asset class for income seeking investors looking for alternatives to cash.

Two pure play fixed income ETFs land in the top 10 ETFs by flow this year, with Vanguard’s Australian Fixed Interest ETF (VAF) in 5th place for total flows, and Betashares Australian Investment Grade Corporate Bond ETF (CRED) landing in 10th place, only a year after launching.

Additionally, a hybrid between cash and fixed income, the Betashares Australian Bank Senior Floating Rate ETF (QPON) came in at 6th place. Hybrid between Shares and Fixed Income, Betashares Active Australian Hybrids Fund (HBRD) came in at 7th place.

Fixed income ETFs made up 23% of all net flows to ETFs over the last year, up from 13% the year before. The options for Fixed Income investors have grown considerably over the last couple of years, and based on their recent popularity, we’re sure we’ll start seeing more.

The below chart shows the flows to each of the main asset classes compared to the previous two financial years.

Growth in flows to Smart Beta and Active ETFs

Whilst Index ETFs still dominate inflows, at 64% of total flows, the growth in flows over the last year has overwhelmingly been to Smart Beta and Active ETFs. Index ETFs took $5.4 billion in flows, up only slightly from $5.3 billion last year.

Smart Beta however took $1.8 Billion in flows, up 42% from last year’s $1.3 billion, and the small but growing Active ETF market grew to $1.1 billion, up from $800 million last year.

The 4th most popular ETF over the last year employs a classic Smart Beta strategy, the Vaneck Vectors Australian Equal Weight ETF (MVW), taking $300m in flows and overcoming one of the disadvantages of index investing by investing in an equal weight across the market.

With the majority of growth in new listings coming in the Smart Beta and Active ETF space, we think we’ll continue to see most of the growth in ETFs coming from these types of ETFs.

How long until $100 billion?

With the champagne corks now popped for the $50 billion milestone, the next major milestone for the ETF market will be $100 billion. With the market growing at 30% year on year now for a number of years, the trend shows this milestone being hit some time in early 2022. However, plenty can happen in the next 3 years, so we can only speculate when this will be hit.

Below we list all of the inflows to all the ETFs on the ASX in the last Financial Year.

Ticker Name Total Inflows (millions) Fund Size (millions) VAS Vanguard Australian Shares Index 797.1 3884.73 VGS Vanguard MSCI Index International Series 453.05 1670.14 A200 Betashares Australia 200 ETF 407.78 516.69 MVW VanEck Vectors Australian Equal Weight ETF 299.78 882.41 VAF Vanguard Australian Fixed Interest Index 261.14 1019.91 QPON BetaShares Australian Bank Senior Floating Rate Bond ETF 258.13 497.81 HBRD BetaShares Active Australian Hybrids Fund (managed fund) 257.5 364.02 BILL iShares Core Cash ETF 252.43 449.71 VAP Vanguard Australian Property Securities Index ETF 233.55 1436 CRED BetaShares Australian Investment Grade Corporate Bond ETF 228.3 244.39 IAF iShares UBS Composite Bond ETF 214.07 846.03 AAA Betashares Australian High Interest Cash ETF 198.67 1509.03 VGAD Vanguard MSCI Index International Series (Hedged) 175.93 619.06 MICH Magellan Infrastructure Fund (Currency Hedged) (Managed Fund) 154.5 372.96 MGE Magellan Global Equities Fund 153.78 1423.11 QUAL VanEck Vectors MSCI World Ex-Australia ETF 152.13 600.47 VEU Vanguard All-World EX US Shares Index 148.47 1438.78 VGB Vanguard Australian Government Bond Index ETF 143.82 295.9 WDMF iShares Edge MSCI World Multifactor ETF 136.61 212.64 PIXX Platinum International Fund (Quoted Managed Hedge Fund) 135.66 320.13 VACF Vanguard Australian Corporate Fixed Interest Index ETF 125.72 262.11 NDQ Betashares NASDAQ 100 121.17 520.61 PLUS VanEck Vectors Australian Corporate Bond Plus ETF 119.02 330.01 VIF Vanguard International Fixed Interest (Hedged) ETF 115.63 322.39 VTS Vanguard US Total Market Shares Index 112.68 1620.38 FAIR BetaShares Australian Sustainability Leaders ETF 109.87 308.76 VDBA Vanguard Diversified Balanced Index ETF 105.12 135.4 IGB IShares UBS Treasury ETF 104.63 143.89 VDHG Vanguard Diversified High Growth Index ETF 101.24 176.45 VGE Vanguard FTSE Emerging Markets Shares 95.49 317.21 VDGR Vanguard Diversified Growth Index ETF 94.78 135.22 VHY Vanguard Australian Shares High Yield ETF 94.38 1234.8 ETHI BetaShares Global Sustainability Leaders ETF 90.56 340.69 MVA VanEck Vectors Australian Property ETF 84.26 237.11 EX20 BetaShares Australian Ex-20 Portfolio Diversifier ETF 82.66 124.79 BBOZ BetaShares Australian Equities Strong Bear (Hedge Fund) 73.66 138.07 BNDS BetaShares Legg Mason Australian Bond Fund (managed fund) 73.62 76.57 PAXX Platinum Asia Fund (Quoted Managed Hedge Fund) 72.51 159.55 IHVV iShares S&P 500 AUD Hedged 69.9 186.84 FLOT Vaneck Vectors Australian Floating Rate ETF 69.27 155.14 VAE Vanguard FTSE Asia ex Japan Shares Index ETF 68.4 170.22 IAA iShares Asia 50 ETF 66.4 514.38 IFRA VanEck Vectors FTSE Global Infrastructure (Hedged) ETF 65.44 154.55 WCMQ WCM Quality Global Growth Fund (Managed Fund) 64.07 72.13 IHCB iShares Global Corporate Bond ETF (Hedged) 61.07 148.52 VSO Vanguard MSCI Australian Small Companies Index 59.33 254.7 RARI Russell Australian ResponsibleÂ Investment ETF 58.66 133.43 IOZ iShares S&P/ASX 200 ETF 58.06 1291.59 IXI iShares Global Consumer Staples ETF 57.1 183.83 ISEC iShares Enhanced Cash ETF 56.76 93 IHWL iShares Core MSCI World All Cap (AUD Hedged) ETF 56.39 67.78 ASIA BetaShares Asia Technology Tigers ETF 55.05 57.92 VBND Vanguard Global Aggregate Bond Index (Hedged) ETF 54.49 74.02 HACK BetaShares Global Cybersecurity ETF 52.78 152.22 WDIV SPDR S&P Global Dividend Fund 51.05 227.8 WVOL iShares Edge MSCI World Minimum Volatility ETF 51.04 67.55 IWLD iShares Core MSCI World All Cap ETF 49.28 83.18 QFN Beta Shares S&P/ASX 200 Financials Sector ETF 48.66 73.22 RCB Russell Australian Select Corporate Bond ETF 45.96 217.59 ZYAU ETFS S&P/ASX 300 High Yield Plus ETF 45.34 110.44 MOAT Vaneck Vectors Morningstar Wide Moat ETF 43.37 113.37 VDCO Vanguard Diversified Conservative Index ETF 42.61 54.56 BBUS Betashares US Eq Strong Bear Hedged Fund 41.27 83.67 VEQ Vanguard FTSE Europe Shares ETF 37.76 238.52 CNEW VanEck Vectors China New Economy ETF 37.36 39.88 GDX VanEck Vectors Gold Miners ETF 35.37 127.93 DJRE SPDR Dow Jones Global Real Estate Fund 35.29 297.42 IKO iShares MSCI South Korea Capped ETF 30.14 67.99 PMGOLD Perth Mint Gold 29.9 192.81 WRLD Betashares Managed Risk Global Share Fund 29.61 61.51 VESG Vanguard Ethically Conscious International Shares Index Fund 28.47 29.78 IJR iShares Core S&P SmallCap 600 27.5 186.91 TECH ETFS Morningstar Global Technology ETF 27.23 87.53 GRNV VanEck Vectors MSCI Australian Sustainable Equity ETF 25.62 36.4 MVOL iShares Edge MSCI Australia Minimum Volatility ETF 25.3 30.04 ROBO ETFS ROBO Global Robotics and Automation ETF 23.86 130.43 BOND SPDR S&P/ASX Australian Bond Fund 23.6 50.28 RBTZ BetaShares Global Robotics and Artificial Intelligence ETF 23.54 25.01 AUST Betashares Managed Risk Australian Share Fund 22.67 47.13 MHG Magellan Global Equities Fund Currency Hedged (Managed Fund) 22.42 101.22 VCF Vanguard International Credit Securities Index (Hedged) ETF 22.3 125.74 AGX1 Antipodes Global Shares (Quoted Managed Fund) 21.65 23.34 QAU BetaShares Gold Bullion ETF - Currency Hedged 20.59 86.86 IOO IShares Global 100 ETF 20.28 1617.55 RINC BetaShares Legg Mason Real Income Fund (managed fund) 19.66 33.4 MVE VanEck Vectors S&P/ASX MidCap ETF 19.46 108.71 FEMX Fidelity Global Emerging Markets Fund (Managed Fund) 19.15 22.43 ESGI VanEck Vectors MSCI International Sustainable Equity ETF 18.87 24.71 SFY SPDR S&P/ASX 50 Fund 17.54 576.83 INES InvestSMART Ethical Securities Fund (Managed Fund) 17.05 17.05 CETF VanEck Vectors ChinaAMC A-Share ETF 16.32 27.65 VBLD Vanguard Global Infrastructure Index ETF 16.22 16.91 XARO ActiveX Ardea Real Outcome Bond Fund (Managed Fund) 15.54 15.78 MOGL Montgomery Global Equities Fund (Managed Fund) 15.38 98.93 GOLD ETFS Physical Gold 15.16 719.46 VGMF Vanguard Global Multi-Factor Active ETF (Managed Fund) 14.19 14.14 ZYUS ETFS S&P 500 High Yield Low Volatility ETF 14.06 66.82 OZF SPDR S&P/ASX 200 Financials ex A-REITS Fund 13.28 77.68 ACDC ETFS Battery Tech & Lithium ETF 12.8 12.16 IJP iShares MSCI Japan ETF 12.69 272.09 QLTY BetaShares Global Quality Leaders ETF 11.78 12.75 IXJ iShares Global Healthcare ETF 10.86 584.23 MVB VanEck Vectors Australian Banks ETF 10.8 47.55 VISM Vanguard MSCI International Small Companies Index ETF 10.2 10.47 IJH iShares Core S&P MidCap 400 9.05 157.95 VVLU Vanguard Global Value Equity Active ETF (Managed Fund) 9.01 14.54 SLF SPDR S&P/ASX 200 Listed Property Fund 8.73 627.45 IHHY iShares Global High Yield Bond (Hedged) ETF 8.59 35.09 SMLL BetaShares Australian Small Companies Select Fund (managed fund) 8.37 30.77 INCM BetaShares Global Income Leaders ETF 8.16 8.39 GROW Schroder Real Return Fund (Managed Fund) 8.1 55.86 CORE ETFS Global Core Infrastructure ETF 8.04 11.86 IHOO iShares Global 100 AUD Hedged 7.85 45.71 VMIN Vanguard Global Minimum Volatility Active ETF (Managed Fund) 7.46 10.39 EINC BetaShares Legg Mason Equity Income Fund (managed fund) 7.4 21.06 KSM K2 Australian Small Cap Fund 7.36 17.56 EMMG BetaShares Legg Mason Emerging Markets Fund (managed fund) 6.51 6.51 IZZ iShares China Large-Cap ETF 6.4 107.9 SPY SPDR S&P 500 ETF Trust 5.95 31.23 QHAL VanEck Vectors MSCI World ex Australia Quality (Hedged) ETF 5.79 6.45 INIF InvestSMART Australian Equity Income Fund (Managed Fund) 5.52 38.32 GGUS Betashares Geared US Equity Fund - Currency Hedged (Hedge Fund) 5.51 26.57 WXHG SPDR S&P World Ex Australia (Hedged) Fund 5.49 88.3 OZR SPDR S&P/ASX 200 Resources Fund 5.44 85.83 GOVT SPDR S&P/ASX Australian Government Bond Fund 5.38 19.64 CURE ETFS S&P Biotech ETF 5.02 5.2 RGB Russell Australian Government Bond ETF 4.9 70.72 QMIX SPDR MSCI World Quality Mix Fund 4.89 14.58 IVE iShares MSCI EAFE ETF 4.8 351.18 DRUG BetaShares Global Healthcare ETF - Currency Hedged 4.71 31.1 AUMF iShares Edge MSCI Australia Multifactor ETF 4.57 14.76 FUEL BetaShares Global Energy Companies ETF - Currency Hedged 4.5 28.8 VEFI Vanguard Ethically Conscious Global Aggregate Bond Index Fund 4.15 4.26 UBW UBS IQ MSCI World ex Australia Ethical ETF 3.94 36.1 ETPMAG ETFS Physical Silver 3.79 62.16 EIGA eInvest Income Generator Fund (Managed Fund) 3.74 20.21 UBE UBS IQ MSCI Europe Ethical ETF 3.59 15.39 FOOD BetaShares Global Agriculture Companies ETF - Currency Hedged 3.55 20.38 RENT AMP Capital Global Property Securities Fund (unhedged) (managed fund) 3.4 20.52 IHEB iShares J.P. Morgan USD Emerging Markets Bond (AUD Hedged) ETF 3.16 17.11 UBP UBS IQ MSCI Asia APREX 50 Ethical ETF 3.05 12.15 ISO iShares S&P/ASX Small Ordinaries ETF 3.03 106.66 ILB iShares UBS Government Inflation ETF 2.86 129.42 REIT VanEck Vectors FTSE International Property (Hedged) ETF 2.37 2.38 MNRS Betashares Global Gold Miners ETF - Currency Hedged 2.21 8.48 VLC Vanguard MSCI Australian Large Companies Index 1.71 92.46 WXOZ SPDR S&P World Ex Australia Fund 1.7 186.44 SSO SPDR S&P/ASX Small Ordinaries Fund 1.6 22.82 NDIA ETFS Reliance India Nifty 50 ETF 1.51 1.51 ETPMPM ETFS Physical Precious Metal Basket 1.22 7.78 UBJ UBS IQ MSCI Japan Ethical ETF 1.15 5.68 RSM Russell Australian Semi-Government Bond ETFÂ 0.95 64.68 IMPQ eInvest Future Impact Small Caps Fund (Managed Fund) 0.7 0.36 ETPMPT ETFS Physical Platinum 0.52 1.68 ETPMPD ETFS Physical Palladium 0.36 2.31 QAG BetaShares Agricultural ETF - Currency Hedged (Synthetic) 0.23 3.18 UBU UBS IQ MSCI USA Ethical ETF 0.01 7.59 GLIN AMP Capital Global Infrastructure Securities Fund (unhedged) (managed fund) -0.03 27.91 MONY UBS IQ Cash ETF -0.3 0.7 QUS Betashares FTSE RAFI US 1000 ETF -0.68 42.94 QCB BetaShares Commodities Basket ETF - Currency Hedged (Synthetic) -0.79 8.56 ETF UBS IQ Morningstar Australia Quality ETF -0.92 7.87 BEAR BetaShares Australian Equities Bear (Hedge Fund) -1.31 46.41 AUDS BetaShares Strong Australian Dollar Fund (hedge fund) -1.35 2.41 DIV UBS IQ Morningstar Australia Dividend Yield ETF -1.73 9.73 OOO BetaShares Crude Oil Index ETF- Currency Hedged (Synthetic) -1.85 26.68 WEMG SPDR S&P Emerging Markets Fund -1.89 19.13 EEU BetaShares Euro ETF -2.31 6.1 YANK BetaShares Strong U.S. Dollar Fund (hedge fund) -2.32 10.43 DMKT AMP Capital Dynamic Markets Fund (Hedge Fund) -3.36 23.61 POU BetaShares British Pound ETF -3.47 17.7 SWTZ Switzer Dividend Growth Fund (Managed Fund) -3.81 73.15 RDV Russell High Dividend Australian Shares ETF -4.87 287.07 ESTX ETFS EURO STOXX 50Â® ETF -5.78 62.22 UMAX Betashares S&P500 Yield Maximiser Fund (Managed Fund) -6.6 90.36 EMKT VanEck Vectors MSCI Multifactor Emerging Markets Equity ETF -7.46 19.04 GEAR BetaShares Geared Australian Equity Fund (Hedge Fund) -8.93 81.24 IVV iShares Core S&P 500 -9.43 3099 MVS VanEck Vectors Small Cap Dividend Payers ETF -9.86 59.97 KII K2 Global Equities Fund (Hedge Fund) -10.83 4.94 IEM iShares MSCI Emerging Markets ETF -11.1 634.95 ZUSD ETFS Physical US Dollar ETF -12.24 8.28 SYI SPDR MSCI Australia Select High Dividend Yield Fund -12.87 155.47 HEUR BetaShares WisdomTree Europe ETF - Currency Hedged -13.53 35.55 BNKS BetaShares Global Banks ETF - Currency Hedged -13.55 52.42 HJPN BetaShares WisdomTree Japan ETF - Currency Hedged -15.83 39.33 IHD iShares S&P/ASX Dividend Opportunities Fund ETF -19.15 241.98 QOZ BetaShares FTSE RAFI Australia 200 ETF -21.97 271.96 UBA UBS IQ MSCI Australia Ethical ETF -25.39 189.09 ILC iShares S&P/ASX 20 ETF -25.39 318.19 HVST BetaShares Australian Dividend Harvester Fund (Managed Fund) -35.68 164.57 MVR VanEck Vectors Australian Resources ETF -40.34 61.01 ITW iShares MSCI Taiwan ETF -40.95 4.68 YMAX BetaShares Australian Top 20 Equity Yield Maximiser Fund -52.26 314.97 STW SPDR S&P/ASX 200 Fund -99.32 3915.16 IEU IShares Europe ETF -99.68 700.2 QRE Beta Shares S&P/ASX 200 Resources Sector ETF -115.07 33.82 USD BetaShares U.S. Dollar ETF -176.19 312.06