Vanguard becomes Australia’s leading ETF issuer

Australia’s ETF market has reached a record high in Assets Under Management despite having a poor Q4 in 2018, according to Vanguard’s recent report.

Most economies struggled in the latter end of 2018, but this news has not stopped Vanguard becoming Australia’s leading ETF issuer. The firm reached $12.07bn in funds under management at 31 December.

Australia’s population have invested over $40bn in to ETFs, a 13.2 per cent increase from 2017. However industry wide cash flow dipped to $6.44bn by the end of 2018, from over $8bn in 2017. Australian ETFs have had an annual growth rate of 32 per cent over the last five years.

Damien Sherman, Head of ETF Capital Markets said: “Despite the challenging investment conditions in 2018 investors continue to embrace the benefits of ETFs, spurring growth in the market, increased competition among issuers and rising trading volumes that have in turn driven down the cost to invest, allowing investors to keep more of the returns they earn.”

2018 was the fourth consecutive year Vanguard has had the leading net new cash flow in the industry. The company represented 41.5 per cent of all ETF cash flows last year.

2018 ETF market net cash flow by issuer (Top 5)

Issuer Cash Flow ($m) Cash Flow
(% of total market)
Vanguard 2670 41.5%
BetaShares 1178 18.3%
VanEck Vectors 759 11.8%
iShares 687 10.7%
Platinum 326 5.1%

 

Vanguard added six ETFs last year to the Australian market, joining its 28-strong suite of exchange traded products, including ESG (Environmental, Social and Governance) and active offerings. Some of the firm’s most popular products include the Vanguard Australian Shares Index ETF (VAS) and Vanguard MSCI Index International Shares ETF (VGS), having cash flows worth 10 per cent and 7.3 per cent of the total market, respectively.

2018 ETF market cash flow by product (Top 5)

Product Cash Flow ($m) Cash Flow
(% of total market)
Vanguard Australian Shares Index ETF (VAS) 648 10.0%
Vanguard MSCI Index International Shares ETF (VGS) 471 7.3%
BetaShares Australia 200 ETF (A200) 416 6.4%
Vanguard All-World ex-U.S. Shares Index ETF (VEU) 249 3.8%
VanEck Vectors Australian Equal Weight ETF (MVW) 233 3.6%

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