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.

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

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.