Increases in ETF FUM can come from two sources:
1) an increase in the price of the ETF and its underlying holdings ; and
2) new investors moving their money into the ETF (i.e. flows).
Best ETFs by funds under management (FUM) growth
The highest FUM growth winners are the large, broad market ETFs that simply track a market index like the S&P/ASX 200. Investors are more likely to be familiar with these ETFs – particularly the broader Australian, global and U.S. markets.
Gold took out top prize for growth this year, with the ETFS Physical Gold (GOLD) assets rising $982m over the past 12 months. Bonds were also a solid driver given their inverse relationship with interest rates (i.e. lower rates = higher bond prices), with the Vanguard Australian Fixed Interest Index ETF (VAF) rising by $516m.
Best ETFs by flows
The Vanguard Australian Shares Index ETF (VAS) continued to attract investor flows and retained its crown as the largest ETF with $1.6b in net flows and increasing its FUM by $741 (a 21% increase). VAS now manages $4.2b of Australian’s ETF money and is the ETF we recommend to our clients. You can find out more about which Australian share is best here.
The iShares Core S&P/ASX 200 ETF (IOZ) which tracks the largest 200 companies in Australia saw the 2nd highest inflows, with $871m new money coming in. Surprisingly, Vanguard Australian Property Securities Index ETF (VAP) took in $548m in new money over the last 12 months, despite being one of the worst performers (losing 32%).
Top 5 ETFs by FUM change
|ASX Code||ETF Name||FUM Mar’19||FUM Mar’20||Change in FUM ($m)|
|GOLD||ETFS Physical Gold||$656.1||$1,637.9||+$981.9|
|VAS||Vanguard Australian Shares Index ETF||$3,458.4||$4,199.4||+$741.0|
|VGS||Vanguard MSCI Index International Shares ETF||$1,484.1||$2,011.7||+$527.6|
|VAF||Vanguard Australian Fixed Interest Index ETF||$878.6||$1,394.8||+$516.2|
|IOZ||iShares Core S&P/ASX 200 ETF||$1,141.6||$1,582.2||+$440.6|