InvestSMART Australian Exchange-Traded Product Quarterly Report - September 2018

The Australian ETP market grew by 7.8% during the September quarter closing at $41.7bn. During the quarter 6 new products were listed. Of the new listings, 3 are exposed to technology related themes, 2 have 'ethical' overlays and 1 seeks to invest in 'quality' global equities.

Introduction

About this report

Welcome to InvestSMART’s September Quarter 2018 Exchange Traded Products (ETP) update.

ETPs form the basis of InvestSMARTs form the basis of a range of InvestSMART’s Professionally Managed Accounts (PMAs). The purpose of this report is to provide our clients with an easy to digest wrap of market activity as well as provide a greater level of insight into how and why we’ve built our SMA portfolios the way we have. 

ETPs are a low-cost, hassle-free way for investors to achieve their investment objectives. Whether your aim is to diversify your portfolio or to obtain exposure to a particular investment theme, the ability to buy ETPs directly on market, their transparency and relatively low cost has seen the popularity of these securities amongst investors grow rapidly. 

We have categorised the ETP market by asset class to allow clients to quickly identify suitable securities to fill any investment gaps in their portfolio and remain aligned to their specific investment objectives.

Figure 1: Asset Classes
Asset ClassDescription
Commodities Exchange Traded Products (ETPs) that provide exposure to various Commodities & Natural Resources.
Currency Exchange Traded Products (ETPs) that provide exposure to various Currencies.
Diversified Exchange Traded Products (ETPs) that provide Diversified Multi Sector exposure
Equities Exchange Traded Products (ETPs) that provide exposure to Equity Markets.
Fixed Income & Cash Exchange Traded Products (ETPs) that provide exposure to Interest Rate securities and Cash.
Property & Infrastructure Exchange Traded Products (ETPs) that provide exposure to Domestic and Global Property and Infrastructure.

We also categorise ETPs throughout the report by their structure. This is an important consideration as each carries its own set of risks. ASIC has sought to clarify the naming conventions in its Information Sheet 230: Exchange traded products

 

In conjunction with this report, clients have access to our ETP filter which can be used to quickly identify securities of interest.

Save time and invest in a diversified portfolio of ETPs with InvestSMART - Now with capped fees
Suitable for all investors as a total portfolio solution or the core of an investment plan.

Diversified

A diversified portfolio for those looking for a better return than cash or saving for the short-term.

Balanced

A diversified portfolio for investors seeking a conservative investment solution.

Core Growth

A diversified portfolio suitable if you’re looking to build your wealth over the medium-term.

High Growth

A diversified portfolio that aims to reward your patience and grow your wealth over the longer term.

About InvestSMART

Founded in 1999, InvestSMART Group Limited (ASX:INV) believes everyone should have the confidence to control their financial future and it shouldn’t be hard or expensive to do so.

Whether you’re managing your own investments or looking for a little help, we deliver straightforward, flexible and affordable solutions to ensure you are better able to meet your investment goals.

Our three leading brands – InvestSMART, Eureka Report and Intelligent Investor – together offer actionable investment tools, wealth advice and independent ASX-listed stock research.

We’re all about making investing simple. Statistics show four in five Australians do not receive any professional investment advice, with cost the primary reason. We aim to change that.

Through our Portfolio Manager, stock research, wealth commentary and affordable investment products, we believe we are delivering the right tools to help all Australians grow and protect their wealth.

InvestSMART Star Rating

Exchange Traded Products (ETPs) are a wonderful way for retail investors to obtain greater control of their wealth and build a fully diversified portfolio themselves at a low cost. As the Australian ETP market grows and more investment options become available, the InvestSMART rating system has been developed to assist investors objectively compare products.

It should be noted that the InvestSMART Star Rating is a quantitative measure and it does not take one’s investment objectives into account. The InvestSMART Star ratings do not constitute recommendations. Additionally, we do not rate Actively Managed Funds (MF) or Structured products (SP). This is because these products carry a different set of risk/ return metrics that are not easily quantifiable. 

Finally, our ratings are designed for comparing ETFs with a similar objective. It is not appropriate for example to use the star rating to compare a highly liquid and low-cost S&P ASX 200 fund to one designed to track emerging markets.

There are five key criteria we use:

Figure 2: InvestSMART Star Rating Criteria
FactorDescription
Size Size refers to funds under management. Size is important, as smaller funds are at risk of being closed where it is not economical for the issuer to run them.
Fees Fees refer to the management fee charged by the issuer. All else being equal, lower fees result in higher returns.
Liquidity While historical trading volumes are not necessarily reflective of total liquidity, it does provide an indication of the ability for investors to execute orders quickly at prices close to Net Asset Value (NAV).
Spread This is the difference between the bid and the offer price, expressed as a %. As an ETF is designed to trade around its NAV, the spread represents a cost to the investor.
Tracking error TETFs are designed to replicate the performance of their stated benchmark. This metric represents how close the funds performance is tracking to its benchmark. Like the spread, tracking error represents a cost to the investor.
Figure 3: Number of ETFs per star rating
Star RatingCount
5 Stars 10
4 Stars 38
3 Stars 59
2 Stars 32
1 Star 5
NR 37
Total 181

Highlights this quarter

How do ETFs track an index?

Exchange Traded Funds (ETFs) were developed to allow investors the ability to invest in an index. As we have discussed previously, how well an issuer is doing this is captured in the tracking error. We speak about this in our March 2018 Report. Given the wide range of geographies and asset classes that investors can now invest in via ETFs, it is important to understand that not all ETFs are constructed equally, and each carry varying forms of risk. 

Replication Methods

The ways in which issuers elect to manage their fund can be categorised under two broad headings, namely ‘physical’ and ‘synthetic’ replication.

Physical

As the name implies, this method involves physically holding the securities in the index. However, the degree to which the issuer holds underlying securities can vary.

  • Full Replication

If an ETF is fully replicating, the issuer will hold securities in the portfolio on a 1:1 basis to the index. This is often the choice for managing ETFs that track liquid, easily accessed indices such as the ASX200 or Dow Jones.

If an ETF is fully replicating, the issuer will hold securities in the portfolio on a 1:1 basis to the index. This is often the choice for managing ETFs that track liquid, easily accessed indices such as the ASX200 or Dow Jones.

  • Partial Replication

Partial replication, often referred to as optimisation or sampling, is used where the underlying index is comprised of a large number of securities (sometimes into the thousands) or those designed to track less liquid securities where the transaction costs of holding every security outweighs the benefits of full replication.

Partial replication strategies carry an increased tracking error risk, or the risk that your fund will not perform in line with the benchmark as closely as a fully replicating fund, however issuers are constantly working to ensure minimal tracking error.

Synthetic

Synthetic replication involves the use of derivatives, such as swaps, to deliver index returns. The most common reasons as to why an issuer may choose to adopt a synthetic structure includes: 

  • Physical holdings are impractical: Often the case for commodities such as oil and agricultural products
  • Complex Strategies: Leveraged & inverse strategies require derivatives to deliver desired outcomes.
  • Market Restrictions: For example, the China A-Shares market does not allow for foreign investment

Synthetic strategies carry an additional layer of risk in the form of counter party risk.

Figure 4: Replication methods.
 PhysicalSynthetic
MethodFull ReplicationPartial/Optimised
Description The index is replicated 1:1 Holds a selection of securities Replication via financial derivatives (swaps)
Typical characteristics of index components Liquid securities Less liquid to illiquid securities Liquid and illiquid, investment restrictions
Typical number of securities in index Low(er) High Low to high
Example ETF IOZ, VAP FLOT, IAF BEAR, OOO

Ways to use Exchange Traded Products

At a basic level, ETPs allow an investor to get exposure to, and maintain a portfolio of securities in a couple of clicks. However, ETPs are more than just market trackers used by lazy investors. They offer a way for retail investors to manage their money like financial professionals, at a fraction of the cost.

Diversification (strategic asset allocation)

ETPs are a great way for investors to manage portfolio diversification themselves as they allow you to invest in asset classes which you may not be familiar with, such as bonds or hybrids or have access to, such as international equities or infrastructure assets. In constructing our diversified portfolios, we use the following ETPs to access various asset classes. 

Figure 5: 5 cheapest ETFs. Source: ASX, Morningstar.
Asset ClassTickerSecurity
Domestic Equities IOZ iShares Core S&P/ASX 200 ETF
Domestic Bonds - Fixed IAF iShares Core Composite Bond ETF
Domestic Bonds - Floating FLOT VanEck Vectors Australian Floating Rate ETF
International Equities VGS Vanguard MSCI Index International Shares ETF
International Bonds VBND Vanguard Global Aggregate Bond Index (Hedged) ETF
Domestic Property VAP VanEck Vectors FTSE Global Infrastructure (Hedged) ETF
Source: ASX and Morningstar
Acting as a stop gap

Great investment ideas aren’t always easy to find, however sitting in cash for too long can be detrimental to long term performance outcomes. During such times, ETPs offer a way in which to remain exposed to the market. The great thing being that when you need to liquidate you can sell immediately with no additional paperwork or exit fee penalties.

Trading positions

As ETPs are priced intraday and can be bought or sold rapidly during market hours, they offer a way for investors to position themselves based on a view in real time without the need for specialised product knowledge (eg, options or CFDs). For example, those seeking to profit from a falling US market may look to purchase units in BBUS (BetaShares US Equities Strong Bear Hedged). Or, if you have a strong view on the future positive performance of the Australia equity market, you could invest in GEAR (BetaShares Geared Australian Equity (Hedged).

Exposure to a sector or theme (tactical asset allocation)

As the local market matures, there is an increasing number of ETPs being listed that are designed to provide exposure to particular sectors or themes. Some examples are listed below. 

Sectors 

There are a number of ETPs now that are designed to provide exposure to a particular sub-sector, for example banks, resources & healthcare. These products provide an ideal way to quickly invest in an undervalued sector in one trade.

Figure 6:  Sectors
TickerSecurity
BNKS BetaShares Global Banks ETF - Currency Hedged
FOOD BetaShares Global Agriculture Companies ETF - Currency Hedged
FUEL BetaShares Global Energy Companies ETF - Currency Hedged
GDX Market Vectors Gold Miners ETF
IXI iShares Global Consumer Staples ETF (AU)
IXJ iShares Global Healthcare ETF (AU)
MVB VanEck Vectors Australian Banks ETF
OZR SPDR S&P/ASX 200 Resources ETF
QFN BetaShares S&P/ASX200 Financials Sector ETF
Source: ASX and Morningstar


Themes

Aside from investing in the performance of broad exposures such as domestic small cap or European shares, there is a growing number of ETPs designed to capture the performance of particular macro thematics. For example, 

Figure 7:  Sectors
TickerSecurity
ACDC ETFS Battery Tech and Lithium
ASIA BetaShares Asia Technology Tigers ETF
HACK Betashares Global Cybersecurity ETF
RBTZ BetaShares Global Robotic & Artificial Intelligence ETF
ROBO ETFS ROBO Global Robotics and Automation ETF
TECH ETFS Morningstar Global Technology ETF
Source: ASX and Morningstar

We caught up with ETF Securities head Kris Walesby recently to chat about ACDC. You can watch here.

Portfolio Strategy

There are several key thematics that are beginning to impact markets and will likely be key to markets over the coming 12 months. These are:

  1. Rising bond yields
  2. Tighter financial conditions
  3. Equity risk premiums topping out

We have already started to see the final quarter being impacted by these thematics with October seeing an equity correction, US bonds yields climbing to five-year highs and the cost of capital increasing further due to another rise in the US Federal Funds rate. The cost of capital will rise further, with the US Federal Reserve forecasting ‘gradual rate raises’ all the way to December 2019.

We point out that these thematics are being created by good economics: US growth is booming, inflation is finally materialising, and not just in the US, employment is powering ahead, which is creating confidence, and corporate earnings are expanding strongly on a year-on-year basis. However, this kind of data does tend to occur in the latter part of a growth cycle and explains why central banks will begin to tighten policy to avoid overheating.

These thematics form the basis for our strategy for the coming 12 months, which is a slow rotation out of ‘Growth’ and a stretched equity market and towards ‘Value’ and ‘Defensive’ indices and sectors.

Market Overview

Source: ASX and Morningstar

Funds under management (FUM)

We also saw 2 funds closing, ETF Securities Physical Singapore Gold ETF (ZGOL) and ETF Securities Physical Renminbi ETF (ZNCH) taking the total number of products on the ASX to 181.

At the end of September, the amount of capital in Australian-listed ETPs exceeded those in Listed Investment Companies (LICs) for the first time.

Flows 

Like last quarter, ‘Equity Large Blend’ again saw standout inflows suggesting continuing interest in overseas investment. At the other end, ‘Equity Australia other’ saw the largest outflows, mainly due to large outflows in resource related securities VanEck Vectors Australian Resources ETF (MVR) & the BetaShares S&P/ASX200 Resources Sector ETF (QRE).

Looking ahead and flows have begun to rotate, October has seen large outflows from Developed Market funds, particularly the US. Over US$15.2 billion left US ETP funds in the second week of October while Europe and Global funds saw US$4.8 billion and US$4.0 billion of outflows respectively. Interestingly, large inflows where seen in Emerging Markets, particularly into China funds, which saw US$2.4 billion of inflow in the same week. This would fit with our view that ‘Value’ is likely to be rotated into.

Globally, ETPs are on track for their second-best year of capital inflows in the past 16 years. On a year-to-date basis global ETPs have seen US$200 billion of inflows with a quarter to go. Last year was the biggest year, with over US$420 billion of inflows* 

* Morgan Stanley – 17/10/2018.

Figure 8: Quarterly Flows

Source: ASX and Morningstar
Figure 9: Cumulative FUM Flows ($M)

Source: ASX and Morningstar
Figure 10: FUM Flows ($M) by Asset Class

Source: ASX and Morningstar
Figure 11: Largest Inflows (QTR)
ETFQtr Flows ($m)Sub Category
[VAS] Vanguard Australian Shares ETF  $147.68 Equity Australia Large Blend
[A200] BetaShares Australia 200 ETF  $123.68 Equity Australia Large Blend
[VGS] Vanguard MSCI Index International ETF  $116.87 Equity World Large Blend
[MVW] VanEck Vectors Australian Equal Wt ETF  $86.39 Equity Australia Large Blend
[FAIR] BetaShares Australian Sustnby Leaders ETF  $85.29 Australian Cash
Source: ASX and Morningstar
Figure 12: Largest Outflows (QTR)
ETFQtr Flows ($m)Sub Category
[STW] SPDR S&P/ASX 200 ETF  $(171.03) Equity Australia Large Blend
[AAA] BetaShares Australian High Interest Cash ETF  $(80.81) Australian Cash
[QRE] BetaShares S&P/ASX200 Res Sect ETF  $(78.61) Equity Australia Other
[QOZ] BetaShares FTSE RAFI Australia 200 ETF  $(66.53) Equity Australia Large Blend
[USD] BetaShares US Dollar ETF  $(37.54) Miscellaneous
Source: ASX and Morningstar


Performance

While international equities in general saw strong performance this quarter, global tech was the standout performer on average. The best performing security in the category being Betashares Cyber Security ETF (HACK). It was a fairly poor quarter for commodity related funds though, with 4 of the 5 worst performing all leveraged to that sector.

Figure 13: Top Five Performing Securities
ETF3 Mnth ReturnSub Category
[GGUS] BetaShares Geared US Equities - Currency Hedged 18.06% Equity World - Currency Hedged
[ETPMPD] ETFS Physical Palladium ETC 17.08% Commodities & Precious Metals
[IXJ] iShares Global Healthcare ETF (AU) 13.93% Equity World Other
[DRUG] BetaShares Global Healthcare ETF - Currency Hedged 12.44% Equity World Other
[NDQ] BetaShares NASDAQ 100 ETF 10.74% Equity North America
Source: ASX and Morningstar
Figure 14: Worst Five Performing Securities
ETF3 Mnth ReturnSub Category
[MNRS] BetaShares Global Gold Miners ETF - Currency Hedged -17.99% Equity Global Resources
[BBUS] BetaShares US Equities Strong Bear Hedged - Currency Hedged -15.31% Alternative Strategies
[GDX] Market Vectors Gold Miners ETF -15.09% Equity Global Resources
[ETPMAG] ETFS Physical Silver ETC -8.99% Commodities & Precious Metals
[QAU] BetaShares Gold Bullion ETF Currency Hedged -5.66% Commodities & Precious Metals
Source: ASX and Morningstar
Figure 15: Returns 3 and 12 months
Source: ASX and Morningstar
3 Month
12 Month
Source: ASX and Morningstar
Figure 16: Sub-category volatility

In finance, volatility implies risk. That is the higher the volatility, the higher the risk. Per below, you can see that the categories to the left of the chart, or more volatile, generally include leveraged, equity and commodity focused securities. To the right we find cash & bonds focused securities. 

We are strong supporters of the benefits of diversification, that is spreading your portfolio across various asset classes for the purposes of reducing risk, and it is interesting to note that despite having allocations to equities, the diversified funds lie toward the low risk end of the spectrum, highlighting the benefit of diversification for risk averse investors.

Securities Overview - Commodities

Source: ASX and Morningstar
CommoditiesFUM ($m)Qtr
Flows ($m)
No. of Funds
$ 775.00 $23.50 9
Source: ASX and Morningstar

Securities designed to provide exposure to the performance of various commodities and natural resources. We do not hold any commodity focused ETPs in our PMA Portfolios.

With volatility increasing and global fixed income markets under pressure flows have been seen into precious metals with gold up over 5% to start October. If global risk continues it likely precious metal ETPs’ will see further inflows in the coming months.

Industrial metals have suffered at the hands of US-China trade relations and weak industrial production from China. However, China has recently announced that it will ‘provide unwavering support for its private sector’ which has seen a copper and aluminium starting October in a more positive fashion. 

Energy markets are moving into the traditionally ‘high demand’ season with the North Hemisphere moving into winter. The high demand period is coupled with supply concerns from the new Iranian trade sanctions and geopolitical tensions with Saudi Arabia. However, the US has reported that it has doubled its inventories to start October and US rig counts are at 2015 high which is likely to see oil moderate over the medium term. 

Source: ASX and Morningstar
Figure 17: Funds Under Management ($m)Figure 18: Geographic Exposure
Figure 19: Flows ($m)
Figure 20: Average Yield
Figure 21: Total Costs
Figure 22: Performance
Figure 23: Average Annual Volatility
Figure 24: Commodities ETFs
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
GLOBAL
Agriculture
[QAG] BetaShares Agriculture ETF Currency Hedged (Synth) 3.11 0.25 0.69% 0.82% 14.67% -4.41% -12.52% 0.00% Annual ETF Miscellaneous 2
Diversified Commodities
[ETPMPM] ETFS Physical PM Basket ETC 6.21 1.22 0.44% 0.55% 9.90% -0.26% 2.77% 0.00% Semi-Annual SP Commodities & Precious Metals NR
[QCB] BetaShares Com Basket ETF Currency Hedged (Synth) 10.16 0.12 0.69% 0.86% 15.68% -2.10% 4.84% 8.78% Annual ETF Commodities & Precious Metals 2
Gold.
[GOLD] ETFS Physical Gold ETC 587.33 15.59 0.40% 0.09% 4.24% -3.14% -0.06% 0.00% Semi-Annual Share Commodities & Precious Metals NR
[QAU] BetaShares Gold Bullion ETF Currency Hedged 60.23 5.96 0.59% 0.25% 6.38% -5.66% -9.38% 0.00% Annual ETF Commodities & Precious Metals 2
Oil
[OOO] BetaShares Crude Oil ETF Currency Hedged (Synth) 30.35 -2.54 0.69% 0.26% 11.14% 2.12% 46.10% 1.28% Annual ETF Commodities & Precious Metals 2
Palladium
[ETPMPD] ETFS Physical Palladium ETC 1.14 $- 0.49% 1.60% 3.88% 17.08% 26.27% 0.00% Quarterly SP Commodities & Precious Metals NR
Platinum
[ETPMPT] ETFS Physical Platinum ETC 1.66 0.52 0.49% 0.40% 3.86% -2.32% -4.40% 0.00% Quarterly SP Commodities & Precious Metals NR
Silver
[ETPMAG] ETFS Physical Silver ETC 55.35 2.42 0.49% 0.29% 4.95% -8.99% -8.44% 0.00% Semi-Annual SP Commodities & Precious Metals NR
Source: ASX and Morningstar

Securities Overview - Currency

CurrencyFUM ($m)Qtr
Flows ($m)
No. of Funds
$ 496.00 $(40.60) 6
Source: ASX and Morningstar

Securities designed to track the performance of the Australian dollar relative to various currencies. We do not hold any currency focused ETPs in our PMA Portfolios. 

The AUD is facing further headwinds in the coming months being a ‘risk’ currency exposed to emerging markets. This coupled with the head winds of higher US interest rates is likely to mean the AUD will be at or below currently levels to finish 2018.

Source: ASX and Morningstar
Figure 25: Funds Under Management ($m)Figure 26: Geographic Exposure
Figure 27: Flows ($m)
Figure 28: Average Yield
Figure 27: Total Costs
Figure 28: Performance
Figure 29: Average Annual Volatility
Figure 30: Currency ETFs
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
EUROPE
[EEU] BetaShares Euro ETF 6.08 -2.31 0.45% 0.15% 7.89% 1.47% 6.07% 0.00% Semi-Annual ETF Miscellaneous 3
[POU] BetaShares British Pound ETF 21.30 0.01 0.45% 0.10% 12.90% 0.88% 5.33% 0.39% Semi-Annual ETF Miscellaneous 3
AUSTRALIA
[AUDS] BetaShares Strong Australian Dollar Hedged 2.62 -1.41 1.38% 0.21% 185.04% -5.60% -19.79% 0.00% Annual MF Alternative Strategies NR
USA
[USD] BetaShares US Dollar ETF 433.79 -37.54 0.45% 0.09% 10.10% 2.42% 9.21% 0.78% Semi-Annual ETF Miscellaneous 5
[YANK] BetaShares Strong US Dollar Hedge 11.25 -0.75 1.38% 0.20% 93.66% 5.03% 18.71% 2.91% Annual MF Alternative Strategies NR
[ZUSD] ETFS Physical US Dollar ETF 21.67 1.40 0.30% 0.20% 12.59% 2.32% 9.35% 0.48% Annual ETF Miscellaneous 2
Source: ASX and Morningstar

Securities Overview - Property & Infrastructure

Property & InfrastructureFUM ($m)Qtr
Flows ($m)
No. of Funds
$ 2,393.00 $114.90 10
Source: ASX and Morningstar


Securities designed to track various domestic and global property & infrastructure indices. We hold positions in VAP, IFRA & DJRE in our PMA Portfolios. 

We have seen downward pressure in infrastructure products due to the ‘bond-proxy’ nature. With interest rates forecasted to increase over the coming year it is likely this pressure will continue into 2019. Listed property however has managed to perform well in 2018 as rental yields from industrial property remains robust. We would also point out that although residential housing in Australia is falling, listed property is more commercially exposure which is weathering the down turn well.

Source: ASX and Morningstar
Figure 31: Funds Under Management ($m)Figure 32: Geographic Exposure
Figure 33: Flows ($m)
Figure 34: Average Yield
Figure 35: Total Costs
Figure 36: Performance
Figure 37: Average Annual Volatility
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Figure 38: Property and Infrastructure ETFs
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
AUSTRALIA
Property
[MVA] VanEck Vectors Australian Property ETF 128.78 7.53 0.35% 0.16% 5.12% 3.83% 13.55% 4.70% Semi-Annual ETF Equity Australia Real Estate 4
[SLF] SPDR S&P/ASX 200 Listed Property ETF 556.34 -3.91 0.40% 0.15% 2.84% 7.18% 18.59% 8.45% Quarterly ETF Equity Australia Real Estate 4
[VAP] Vanguard Australian Property Securities ETF 1,098.94 54.53 0.23% 0.11% 4.51% 1.91% 13.06% 2.64% Quarterly ETF Equity Australia Real Estate 4
Property & Infrastructure
[RINC] BetaShares Legg Mason Real Income Fund 14.86 4.65 0.85% 0.45% 12.31% -0.07% 0.00% 2.48% Quarterly MF Equity Australia Real Estate NR
GLOBAL
Infrastructure
[GLIN] AMP Capital - Global Infrastructure Securities Unhedged 22.83 -1.11 0.85% 0.69% 4.73% 1.83% 6.26% 2.40% Quarterly MF Infrastructure - Global NR
[IFRA] VanEck Vectors FTSE Global Infrastructure (Hedged) ETF 83.10 7.01 0.52% 0.21% 7.42% -0.03% 2.77% 3.90% Quarterly ETF Infrastructure - Global 3
[MICH] Magellan Infrastructure Currency Hedged ETF 208.26 29.92 1.05% 0.42% 6.04% -0.13% 5.71% 2.76% Semi-Annual MF Infrastructure - Global NR
[CORE] ETFS Global Core Infrastructure ETF 3.24 0.00 0.45% 0.61% 8.26% 2.99% 9.25% 2.53% Quarterly ETF Equity World Other 2
Property
[DJRE] SPDR Dow Jones Global Real Estate ETF 260.65 15.21 0.50% 0.16% 5.66% 1.30% 11.07% 3.16% Semi-Annual ETF Equity Global Real Estate 3
[RENT] AMP Capital - Global Property Securities Unhedged 16.20 1.04 0.99% 0.77% 3.07% 2.28% 13.44% 1.40% Quarterly MF Equity Global Real Estate NR
Source: ASX and Morningstar

Securities Overview - Fixed Income & Cash

Fixed Income & CashFUM ($m)Qtr
Flows ($m)
No. of Funds
$ 5,062.00 $445.70 27
Source: ASX and Morningstar


Securities designed to provide investors access to domestic and global fixed income & cash markets. We hold positions in AAA, FLOT, QPON, VBND, IAF, VACF, VGB & IGB in our PMA Portfolios.

Global fixed income is facing longer-term weakness as the economic picture, particularly in the US, remains robust which will likely see higher cash rates in 2019. The prospect of higher interest rates from the US Federal Reserve will push yields higher and will cause bond capital to decline. Australian fixed income on the other hand remains stoic; the Reserve Bank currently has no plans to shift rates in either direction, while there are no foreseeable changes to Australia’s sovereign rating on the horizon. This is likely to make Australian fixed interest a stable capital investment for the income investors. 

 

Source: ASX and Morningstar
Figure 39: Funds Under Management ($m)Figure 40: Geographic Exposure
Figure 41: Flows ($m)
Figure 42: Average Yield
Figure 43: Total Costs
Figure 44: Performance
Figure 45: Average Annual Volatility
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Figure 46: Fixed Income and Cash ETFs
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
GLOBAL
Corporate
[IHCB] iShares Core Global Corporate Bond AUDH ETF 88.23 7.31 0.26% 0.27% 7.30% 0.90% -0.07% 2.76% Tri-Annual ETF Diversified Credit 3
[IHHY] iShares Global High Yield Bond AUDH ETF 26.76 0.01 0.56% 0.34% 5.87% 2.37% 2.33% 4.74% Tri-Annual ETF High Yield Credit 2
Diversified
[IHEB] iShares JP Morgan USD Emerging Markets Bond AUDH ETF 13.19 0.01 0.51% 0.41% 6.14% 2.14% -3.08% 4.13% Tri-Annual ETF Bonds-Emerging Market Debt 2
[VCF] Vanguard International Credit Securities Index (Hedged) ETF 100.44 2.66 0.30% 0.21% 7.01% 0.54% 0.44% 3.82% Quarterly ETF Diversified Credit 3
[VBND] Vanguard Global Aggregate Bond Hedged ETF 28.71 12.01 0.20% 0.23% 17.58% -0.07% 0.00% 1.27% Quarterly ETF Bonds - Global 3
[VEFI] Vanguard Ethically Conscious Global Aggregate Bond Index (Hedged) ETF 1.00 1.00 0.26% 0.34% 0.98% 0.00% 0.00% 0.00% Quarterly ETF Bonds - Global 2
Government
[VIF] Vanguard International Fixed Interest Index (Hedged) ETF 217.50 24.64 0.20% 0.16% 7.63% -0.51% 1.08% 1.99% Quarterly ETF Bonds - Global 4
AUSTRALIA
Cash
[AAA] BetaShares Australian High Interest Cash ETF 1,229.91 -80.81 0.18% 0.02% 16.56% 0.33% 1.85% 2.02% Monthly ETF Australian Cash 5
[BILL] iShares Core Cash ETF 282.36 85.29 0.07% 0.01% 17.01% 0.34% 1.69% 1.78% Monthly ETF Australian Cash 5
[ISEC] iShares Enhanced Cash ETF 65.28 29.13 0.12% 0.01% 19.69% 0.39% 1.87% 1.93% Monthly ETF Australian Short Term Fixed Interest 4
[MONY] UBS IQ Cash ETF 1.00 0.00 0.18% 0.09% 0.75% 0.37% 1.47% 1.72% Monthly ETF Australian Cash 4
Corporate
[PLUS] VanEck Vectors Australian Corp Bd ETF 222.34 27.33 0.32% 0.18% 5.87% 0.74% 3.92% 3.49% Quarterly ETF Diversified Credit 4
[RCB] Russell Investment Australian Select Corporate Bond ETF 177.91 12.10 0.28% 0.27% 5.36% 0.78% 2.14% 3.14% Quarterly ETF Bonds - Australia 3
[VACF] Vanguard Australian Corp Fixed Interest ETF 150.97 24.31 0.26% 0.14% 8.08% 0.77% 3.75% 2.47% Quarterly ETF Bonds - Australia 4
[FLOT] VanEck Vectors Australian Floating Return ETF 136.45 51.24 0.22% 0.08% 18.28% 0.50% 2.14% 2.35% Monthly ETF Diversified Credit 4
[QPON] Betashares Australian Bank Sr Floating Return Bond ETF 296.82 59.36 0.22% 0.05% 12.21% 0.70% 2.26% 2.55% Monthly ETF Diversified Credit 4
[CRED] BetaShares Australian Investment Geared Corporate Bond ETF 62.10 58.30 0.25% 0.14% 58.14% 0.34% 0.00% 1.22% Monthly ETF Bonds - Australia 4
Diversified
[IAF] iShares Core Composite Bond ETF 623.57 40.20 0.20% 0.06% 6.02% 0.49% 3.52% 2.28% Quarterly ETF Bonds - Australia 4
[VAF] Vanguard Australian Fixed Interest ETF 718.39 15.45 0.20% 0.05% 5.28% 0.49% 3.53% 2.86% Quarterly ETF Bonds - Australia 4
Government
[BOND] SPDR S&P/ASX Australian Bond ETF 23.49 0.01 0.24% 0.13% 5.31% 5.77% 8.94% 2.52% Quarterly ETF Bonds - Australia 3
[GOVT] SPDR S&P/ASX Australian Government Bond ETF 12.96 0.00 0.22% 0.14% 8.16% 0.40% 3.56% 2.13% Quarterly ETF Bonds - Australia 3
[IGB] iShares Treasury ETF 35.96 5.16 0.26% 0.10% 17.93% 0.39% 3.61% 2.15% Quarterly ETF Bonds - Australia 3
[ILB] iShares Government Inflation ETF 117.21 1.17 0.26% 0.15% 5.84% -0.57% 4.07% 0.92% Quarterly ETF Bonds - Inflation - Linked 3
[RGB] Russell Investment Australian Government Bond ETF 60.39 0.00 0.24% 0.25% 1.52% 0.43% 2.97% 2.00% Quarterly ETF Bonds - Australia 3
[RSM] Russell Investment Australian Semi-Government Bond ETF 61.34 0.01 0.26% 0.23% 2.19% 0.54% 2.30% 2.03% Quarterly ETF Bonds - Australia 3
[VGB] Vanguard Australian Government Bond ETF 146.36 9.42 0.20% 0.09% 7.81% 0.42% 3.58% 2.80% Quarterly ETF Bonds - Australia 4
Hybrids
[HBRD] BetaShares Active Australian Hybrids Fund (managed fund) 161.37 60.42 0.55% 0.16% 16.51% 1.88% 0.00% 3.35% Monthly MF Diversified Credit NR
Source: ASX and Morningstar

Securities Overview - Diversified

DiversifiedFUM ($m)Qtr
Flows ($m)
No. of Funds
$ 305.00 $95.00 6
Source: ASX and Morningstar


Securities designed to provide investors with diversified multi sector asset allocation. We manage a range of diversified PMA Portfolios.

Source: ASX and Morningstar
Figure 47: Funds Under Management ($m)Figure 48: Geographic Exposure
Figure 49: Flows ($m)
Figure 50: Average Yield
Figure 51: Total Costs
Figure 52: Performance
Figure 53: Average Annual Volatility
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Figure 54: Diversified ETFs
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
GLOBAL
Balanced
[DMKT] AMP Capital - Dynamic Markets ETF (Hedge) 30.98 3.16 0.50% 0.69% 4.87% -2.38% 0.63% 2.90% Semi-Annual MF Multisector Balanced NR
[GROW] Schroder Real Return ETF 56.90 9.81 0.90% 0.51% 7.11% 1.55% 4.99% 3.40% Semi-Annual MF Multisector Balanced NR
[VDBA] Vanguard Diversified Balanced ETF 50.67 26.43 0.27% 0.20% 23.78% 2.07% 0.00% 1.16% Quarterly ETF Multisector Balanced 3
Conservative
[VDCO] Vanguard Diversified Conservative ETF 16.20 6.43 0.27% 0.23% 14.92% 1.30% 0.00% 1.01% Quarterly ETF Multisector Moderate 2
High Growth
[VDHG] Vanguard Diversified High Growth ETF 93.02 25.89 0.27% 0.17% 12.86% 3.67% 0.00% 2.23% Quarterly ETF Multisector Aggressive 3
Growth
[VDGR] Vanguard Diversified Growth ETF 57.52 23.28 0.27% 0.19% 17.78% 2.87% 0.00% 1.90% Quarterly ETF Multisector Growth 3
Source: ASX and Morningstar

Securities Overview - Equities

EquitiesFUM ($m)Qtr
Flows ($m)
No. of Funds
$ 32,712.00 $ 1,187.60 123
Source: ASX and Morningstar


This group of securities provides the investor with broad-based as well as specific sector exposure across domestic and international equity markets. We hold positions in IAA, IVV, VEQ, UMAX, VGS & IOZ in our PMA Portfolios. 

The US equity markets just had its best quarter since 2013 and saw IVV for example adding over 10% in the September quarter as it also benefited from the falling AUD. Looking ahead, US equity markets have begun to find sellers and the fact Value is becoming more attractive may see rotations to differing equity markets in the coming year. For example: Asian equities which have fallen over 30% in the past six months and sectors with a value thematic such as staples are likely to see rotation flows as markets reposition into 2019.

Source: ASX and Morningstar
Figure 55: Funds Under Management ($m)
Figure 56: Geographic Exposure
Figure 57: Flows ($m)
Figure 58: Average Yield
Figure 59: Total Costs
Figure 60: Performance
Figure 61: Average Annual Volatility
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Figure 62: Equity ETFs Europe
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
EUROPE
Equities - Broad
[ESTX] ETFS EURO STOXX 50 ETF 64.34 -3.82 0.35% 0.17% 9.02% 1.89% 3.57% 3.57% Semi-Annual ETF Equity Europe 3
[HEUR] BetaShares WisdomTree Europe ETF - Currency Hedged 45.91 -2.48 0.58% 0.19% 11.42% 0.00% -0.17% 4.07% Semi-Annual ETF Equity Europe 3
[IEU] iShares Europe ETF (AU) 776.71 -21.19 0.60% 0.11% 4.97% 2.53% 7.44% 2.43% Semi-Annual ETF Equity Europe 4
[VEQ] Vanguard FTSE Europe Shares ETF 217.45 16.96 0.35% 0.13% 7.29% 2.55% 7.28% 2.50% Quarterly ETF Equity Europe 4
Equities - Strategy
[UBE] UBS IQ MSCI Europe Ethical ETF 11.64 0.02 0.40% 0.32% 3.70% 2.98% 8.39% 2.58% Annual ETF Equity Europe 2
Source: ASX and Morningstar
Figure 63: Equity ETFs Emerging Markets
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
EMERGING MARKETS
Equities - Broad
[IEM] iShares MSCI Emerging Markets ETF (AU) 618.42 -9.33 0.69% 0.13% 9.07% 0.93% 7.00% 1.80% Semi-Annual ETF Equity Emerging Markets 4
[VGE] Vanguard FTSE Emerging Markets Shares ETF 233.30 26.06 0.48% 0.20% 11.77% 0.10% 3.84% 1.73% Quarterly ETF Equity Emerging Markets 3
[WEMG] SPDR S&P Emerging Markets ETF 19.05 -1.00 0.65% 0.26% 21.50% 1.50% 7.84% 2.44% Annual ETF Equity Emerging Markets 2
Equities - Strategy
[EMKT] VanEck Vectors MSCI Mltfac Emerging Markets Equities ETF 7.46 -7.46 0.69% 0.53% 21.18% -3.92% 0.00% 0.48% Annual ETF Equity Emerging Markets 2
Source: ASX and Morningstar
Figure 64: Equity ETFs USA
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
USA
Equities - Broad
[IJH] iShares S&P Mid - Capital ETF 157.22 5.08 0.07% 0.15% 10.73% 6.00% 23.78% 0.81% Quarterly ETF Equity North America 4
[IJR] iShares S&P Small - Capital ETF 190.11 14.03 0.07% 0.50% 6.97% 7.03% 29.25% 0.68% Quarterly ETF Equity North America 3
[IVV] iShares S&P 500 ETF 3,016.49 -2.09 0.04% 0.08% 3.98% 9.97% 27.82% 1.02% Quarterly ETF Equity North America 5
[NDQ] BetaShares NASDAQ 100 ETF 438.07 59.87 0.48% 0.09% 11.65% 10.74% 38.91% 0.44% Semi-Annual ETF Equity North America 4
[QUS] BetaShares FTSE RAFI US 1000 ETF 43.64 0.06 0.40% 0.18% 6.00% 8.25% 21.82% 2.88% Semi-Annual ETF Equity North America 3
[SPY] SPDR S&P 500 ETF 24.95 1.00 0.09% 0.19% 6.52% 9.93% 27.69% 1.41% Quarterly ETF Equity North America 3
[VTS] Vanguard US Total Market Shares ETF 1,496.42 29.95 0.04% 0.07% 4.07% 8.84% 26.95% 0.98% Quarterly ETF Equity North America 5
Equities - Strategy
[GGUS] BetaShares Geared US Equities - Currency Hedged 18.94 -1.86 0.80% 0.13% 41.62% 18.06% 35.54% 0.63% Annual MF Equity World - Currency Hedged NR
[IHVV] iShares S&P 500 AUD Hedged ETF 140.01 26.47 0.10% 0.15% 14.66% 7.61% 17.18% 2.73% Annual ETF Equity North America 4
[UBU] UBS IQ MSCI USA Ethical ETF 7.43 0.01 0.20% 0.21% 2.54% 9.59% 27.47% 1.90% Annual ETF Equity North America 2
[UMAX] BetaShares S&P 500 Yield Maximiser 97.53 -3.01 0.79% 0.17% 3.64% 9.03% 21.12% 4.37% Quarterly MF Equity World Other NR
[ZYUS] ETFS S&P 500 High Yield Low Volatil ETF 56.23 3.34 0.35% 0.19% 7.17% 3.97% 13.03% 5.52% Quarterly ETF Equity North America 3
[BBUS] BetaShares US Equities Strong Bear Hedged - Currency Hedged 69.97 20.53 1.38% 0.26% 33.92% -15.31% -32.86% 0.00% Annual MF Alternative Strategies NR
Source: ASX and Morningstar
Figure 65: Equity ETFs Asia
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
ASIA.
Equities - Broad
[CETF] Market Vectors ChinaAMC A - Share ETF (Syn) 15.93 6.06 0.72% 0.58% 23.00% -2.49% -6.04% 1.04% Annual ETF Equity Greater China 1
[HJPN] BetaShares WisdomTree Japan ETF - Currency Hedged 63.73 -2.41 0.58% 0.22% 15.73% 7.16% 8.14% 2.69% Semi-Annual ETF Equity Japan 3
[IAA] iShares Asia 50 ETF (AU) 485.06 40.84 0.50% 0.31% 8.04% 1.22% 13.32% 1.37% Semi-Annual ETF Equity Asia Pacific w/o Japan 3
[IJP] iShares MSCI Japan ETF (AU) 297.89 19.09 0.48% 0.16% 8.57% 5.81% 19.11% 1.14% Semi-Annual ETF Equity Japan 4
[IKO] iShares MSCI South Korea ETF (AU) 64.91 21.71 0.64% 0.49% 14.25% 2.70% 10.64% 2.46% Annual ETF Equity World Other 2
[ITW] iShares MSCI Taiwan ETF 50.71 -0.80 0.64% 0.78% 1.06% 7.23% 17.26% 2.11% Annual ETF Equity World Other 2
[IZZ] iShares China Large - Capital ETF (AU) 104.45 4.86 0.74% 0.38% 18.13% 1.14% 9.84% 2.73% Semi-Annual ETF Equity Greater China 3
[VAE] Vanguard FTSE Asia ex Japan Shares Index ETF 112.35 14.83 0.40% 0.23% 10.11% 0.77% 9.82% 2.73% Quarterly ETF Equity Asia Pacific w/o Japan 3
[PAXX] Platinum Asia (Quoted Managed Hedged) 132.46 43.72 1.10% 0.39% 14.68% -2.68% 5.16% 24.88% Annual MF Equity Asia Pacific w/o Japan NR
Equities - Strategy
[UBJ] UBS IQ MSCI Japan Ethical ETF 4.84 0.01 0.40% 0.22% 5.09% 5.80% 19.28% 1.74% Annual ETF Equity Japan 2
[UBP] UBS IQ MSCI Asia APEX 50 Ethical ETF 11.05 2.06 0.45% 0.32% 12.22% -0.10% 9.69% 1.02% Annual ETF Equity Asia Pacific w/o Japan 2
[ASIA] BetaShares Asia Technology Tigers ETF 7.34 7.34 0.67% 0.27% 90.45% 0.00% 0.00% 0.00% Annual ETF Equity World Other 1
Source: ASX and Morningstar
Figure 66: Equity ETFs Australia
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
AUSTRALIA
Equities - Broad
[EX20] BetaShares Australian ex-20 Portfolio Diversified ETF 89.70 54.23 0.25% 0.16% 26.13% 1.54% 16.14% 4.35% Semi-Annual ETF Equity Australia Large Blend 3
[ILC] iShares S&P/ASX 20 ETF 306.20 -16.72 0.24% 0.11% 3.92% 1.46% 12.31% 4.45% Quarterly ETF Equity Australia Large Blend 4
[IOZ] iShares Core S&P/ASX 200 ETF 1,210.82 37.42 0.15% 0.06% 5.46% 1.49% 13.74% 3.66% Quarterly ETF Equity Australia Large Blend 5
[ISO] iShares S&P/ASX Small Ordinaries ETF 116.78 11.13 0.55% 0.29% 7.96% 0.95% 19.44% 1.86% Semi-Annual ETF Equity Australia Mid/Small Blend 3
[MVE] VanEck Vectors S&P/ASX MidCap ETF 100.01 8.77 0.45% 0.15% 7.05% 3.44% 16.77% 2.23% Semi-Annual ETF Equity Australia Mid/Small Blend 3
[MVS] VanEck Vectors Small Companies Masters ETF 61.09 -7.36 0.49% 0.18% 10.12% -1.60% 15.67% 3.24% Semi-Annual ETF Equity Australia Mid/Small Blend 3
[MVW] VanEck Vectors Australian Equal Wt ETF 623.68 86.39 0.35% 0.08% 8.69% 3.21% 15.98% 2.63% Semi-Annual ETF Equity Australia Large Blend 4
[QOZ] BetaShares FTSE RAFI Australia 200 ETF 213.76 -66.53 0.40% 0.11% 19.46% 1.08% 11.33% 6.09% Semi-Annual ETF Equity Australia Large Blend 4
[SFY] SPDR S&P/ASX 50 ETF 519.17 6.20 0.29% 0.06% 3.52% 1.16% 12.07% 4.59% Quarterly ETF Equity Australia Large Blend 4
[SSO] SPDR S&P/ASX Small Ordinaries ETF 23.35 1.58 0.50% 0.20% 5.59% 0.64% 19.28% 2.15% Semi-Annual ETF Equity Australia Mid/Small Blend 2
[STW] SPDR S&P/ASX 200 ETF 3,623.93 -171.03 0.19% 0.04% 8.09% 1.50% 13.73% 4.06% Quarterly ETF Equity Australia Large Blend 5
[VAS] Vanguard Australian Shares ETF 2,990.26 147.68 0.14% 0.04% 7.38% 1.45% 13.84% 4.36% Quarterly ETF Equity Australia Large Blend 5
[VLC] Vanguard MSCI Australian Large Companies ETF 83.84 0.02 0.20% 0.07% 2.63% 1.18% 11.31% 4.33% Quarterly ETF Equity Australia Large Blend 4
[VSO] Vanguard MSCI Australian Small Companies ETF 216.98 26.86 0.30% 0.13% 7.35% 1.34% 18.10% 1.92% Semi-Annual ETF Equity Australia Mid/Small Blend 4
[ZOZI] ETFS S&P/ASX 100 ETF 9.47 0.01 0.24% 0.16% 2.13% 1.46% 12.92% 4.07% Quarterly ETF Equity Australia Large Blend 3
[A200] BetaShares Australia 200 ETF 172.11 123.68 0.07% 0.04% 51.11% 1.59% 0.00% 1.27% Quarterly ETF Equity Australia Large Blend 5
Equities - Sector
[MVB] VanEck Vectors Australian Banks ETF 39.25 4.49 0.28% 0.11% 9.50% -2.07% 1.40% 5.04% Tri-Annual ETF Equity Australia Other 3
[MVR] VanEck Vectors Australian Resources ETF 59.17 -36.90 0.35% 0.17% 38.41% -0.23% 24.58% 2.23% Semi-Annual ETF Equity Australia Other 3
[OZF] SPDR S&P/ASX 200 Financials EX A-REIT ETF 66.66 4.07 0.40% 0.11% 6.73% -0.34% 0.88% 4.75% Semi-Annual ETF Equity Australia Other 4
[OZR] SPDR S&P/ASX 200 Resources ETF 76.12 2.25 0.40% 0.18% 10.10% 0.58% 28.90% 2.15% Semi-Annual ETF Equity Australia Other 3
[QFN] BetaShares S&P/ASX200 Financials Sect ETF 21.95 0.03 0.39% 0.14% 32.31% -0.31% 0.85% 4.27% Semi-Annual ETF Equity Australia Other 3
[QRE] BetaShares S&P/ASX200 Res Sect ETF 69.70 -78.61 0.39% 0.22% 55.46% 0.70% 29.28% 1.15% Semi-Annual ETF Equity Australia Other 3
Equities - Strategy
[AUMF] iShares Edge MSCI Australia Multifactor ETF 12.71 3.49 0.30% 0.46% 11.63% 1.11% 14.10% 7.41% Semi-Annual ETF Equity Australia Large Blend 2
[AUST] BetaShares Managed Risk Australian Share 28.21 6.61 0.49% 0.17% 13.61% 1.23% 11.32% 4.44% Semi-Annual MF Equity Australia Large Blend NR
[BBOZ] BetaShares Australian Equities Strong BearHdg 88.57 1.22 1.38% 0.14% 29.49% -1.95% -23.90% 0.00% Annual MF Alternative Strategies NR
[BEAR] BetaShares Australian Equities Bear Hedge 52.67 2.02 1.38% 0.13% 20.33% -0.73% -10.50% 0.00% Annual MF Alternative Strategies NR
[DIV] UBS IQ Morningstar Australia Diversified Yield ETF 10.15 -0.97 0.30% 0.22% 3.65% 1.24% 8.19% 5.07% Quarterly ETF Equity Australia Large Growth 3
[ETF] UBS IQ Morningstar Australia Quality ETF 8.62 0.03 0.30% 0.18% 3.40% 2.45% 9.09% 3.09% Semi-Annual ETF Equity Australia Large Blend 3
[FDIV] VanEck Vectors S&P/ASX Franked Diversified ETF 3.96 0.00 0.35% 0.16% 9.20% 1.96% 11.14% 5.60% Quarterly ETF Equity Australia Large Blend 3
[GEAR] BetaShares Geared Australian Equity (Hedged) 67.96 -6.96 0.80% 0.18% 15.85% 1.30% 24.94% 6.70% Semi-Annual MF Equity Australia Large Geared NR
[IHD] iShares S&P/ASX Dividend Opportunities ETF 238.51 -12.15 0.30% 0.15% 4.25% -1.45% 4.90% 5.12% Quarterly ETF Equity Australia Large Value 4
[MVOL] iShares Edge MSCI Australia Mini Volume ETF 2.20 0.01 0.30% 0.15% 15.41% 0.69% 11.94% 7.38% Semi-Annual ETF Equity Australia Large Blend 3
[RARI] Russell Investment Australian Responsible Investment ETF 80.05 8.75 0.45% 0.32% 4.51% 1.34% 9.83% 5.86% Semi-Annual ETF Equity Australia Large Value 3
[RDV] Russell Investment High Dividend Australian Shares ETF 280.07 0.86 0.34% 0.13% 2.65% 1.61% 2.75% 6.77% Quarterly ETF Equity Australia Large Value 4
[SMLL] BetaShares Australian Small Companies Select 24.59 3.09 0.39% 0.48% 5.52% -0.43% 14.14% 4.90% Semi-Annual MF Equity Australia Mid/Small Blend NR
[SWTZ] Switzer Dividend Growth 74.11 -2.49 0.89% 0.60% 3.08% 0.81% 7.95% 6.02% Quarterly MF Equity Australia Large Growth NR
[SYI] SPDR MSCI Australia Select High Diversified Yield ETF 151.00 -8.80 0.35% 0.09% 5.25% 0.14% 5.39% 5.92% Quarterly ETF Equity Australia Large Value 4
[UBA] UBS IQ MSCI Australia Ethical ETF 194.72 -12.19 0.17% 0.13% 2.89% 1.14% 13.23% 3.92% Semi-Annual ETF Equity Australia Large Blend 4
[VHY] Vanguard Australian Shares High Yield ETF 1,078.80 0.68 0.25% 0.08% 4.83% 3.18% 4.66% 8.07% Quarterly ETF Equity Australia Large Blend 4
[YMAX] BetaShares Australian Top 20 Equities Yield Maxmsr 365.19 -9.59 0.79% 0.21% 4.27% 1.14% 8.62% 8.45% Quarterly MF Equity Australia Large Blend NR
[ZYAU] ETFS S&P/ASX 300 High Yield Plus ETF 75.47 13.60 0.35% 0.17% 10.91% -0.64% 6.04% 5.78% Quarterly ETF Equity Australia Large Blend 3
[HVST] BetaShares Australian Diversified Harvester (mgd) 181.76 -14.01 0.90% 0.12% 7.39% -0.49% 0.63% 10.44% Monthly MF Equity Australia Large Value NR
[KSM] K2 Australian Small Capital Fund 26.36 11.66 2.70% 1.24% 16.25% 2.88% 5.43% 6.81% Annual MF Alternative Strategies NR
[FAIR] BetaShares Australian Sustnby Leaders ETF 178.88 9.85 0.49% 0.14% 6.11% 3.91% 0.00% 1.15% Semi-Annual ETF Equity Australia Large Blend 4
[EINC] BetaShares Legg Mason Equity Income Fund 18.09 5.27 0.85% 0.35% 12.25% 0.46% 0.00% 2.03% Quarterly MF Equity Australia Large Value NR
[EIGA] eInvest Income Generator ETF 21.36 3.64 0.80% 0.59% 7.82% 0.00% 0.00% 1.21% 0 MF Equity Australia Large Value NR
[INIF] InvestSMART Australian Equity Income ETF 36.84 2.88 1.24% 0.56% 4.62% -0.37% 0.00% 0.00% Semi-Annual MF Equity Australia Large Blend NR
Source: ASX and Morningstar
Figure 67: Equity ETFs Global
NameTotal FUMQtr Flows ($M)MERAvg SpreadAvg Liquidity3MTH Return12MTH ReturnYieldFrequencyStructureSub CategorySTAR Rating
GLOBAL
Equities - Broad
[IHOO] iShares Global 100 AUD Hedged ETF 37.35 0.34 0.43% 0.39% 5.05% 7.11% 14.54% 7.30% Annual ETF Equity World - Currency Hedged 2
[IHWL] iShares Core MSCI World All Capital AUDH ETF 58.14 45.68 0.19% 0.41% 29.73% 5.23% 12.67% 2.01% Semi-Annual ETF Equity World - Currency Hedged 3
[IOO] iShares Global 100 ETF (AU) 1,557.95 14.81 0.40% 0.15% 2.63% 8.73% 22.78% 1.71% Semi-Annual ETF Equity World Large Blend 3
[IVE] iShares MSCI EAFE ETF (AU) 343.70 -1.68 0.33% 0.20% 5.65% 3.47% 11.36% 2.46% Semi-Annual ETF Equity World Large Blend 4
[IWLD] iShares Core MSCI World All Capital ETF 49.50 18.39 0.16% 0.34% 14.15% 6.80% 20.45% 2.20% Semi-Annual ETF Equity World Large Blend 3
[KII] K2 Global Equities Fund (Hedge Fund) 15.59 -1.84 2.70% 1.36% 4.01% 0.73% 4.96% 0.00% Quarterly MF Alternative Strategies NR
[MGE] Magellan Global Equities 1,198.67 45.71 1.35% 0.34% 3.96% 8.93% 25.43% 2.80% Annual MF Equity World Large Blend NR
[MHG] Magellan Global Equities Currency Hedged 74.13 2.27 1.35% 0.49% 3.45% 6.88% 16.25% 3.75% Annual MF Equity World - Currency Hedged NR
[QUAL] VanEck Vectors MSCI World ex Australian Qlty ETF 462.15 49.23 0.40% 0.16% 6.50% 9.24% 26.38% 1.63% Annual ETF Equity World Large Blend 4
[UBW] UBS IQ MSCI World ex Australia Ethical ETF 32.96 1.42 0.35% 0.21% 4.52% 7.31% 20.83% 1.91% Annual ETF Equity World Large Blend 3
[VEU] Vanguard All - World ex-US Shares ETF 1,352.70 59.06 0.11% 0.12% 4.40% 3.04% 10.28% 2.31% Quarterly ETF Equity World Large Blend 5
[VGAD] Vanguard MSCI Index International (Hedged) ETF 449.95 18.18 0.21% 0.08% 6.79% 5.61% 12.85% 1.92% Semi-Annual ETF Equity World - Currency Hedged 4
[VGS] Vanguard MSCI Index International ETF 1,290.63 116.87 0.18% 0.07% 6.92% 7.35% 20.84% 2.33% Quarterly ETF Equity World Large Blend 4
[WXHG] SPDR S&P World ex Australia (Hedged) ETF 88.33 1.24 0.35% 0.18% 3.23% 5.45% 12.37% 2.19% Annual ETF Equity World - Currency Hedged 3
[WXOZ] SPDR S&P World ex Australia ETF 186.06 1.64 0.30% 0.15% 1.53% 7.21% 20.45% 2.25% Annual ETF Equity World Large Blend 3
[PIXX] Platinum International (Quoted Managed Hedged) 290.63 79.34 1.10% 0.31% 11.27% -0.29% 6.59% 13.24% Annual MF Equity World Large Blend NR
Equities - Sector
[BNKS] BetaShares Global Banks ETF - Currency Hedged 75.34 2.86 0.57% 0.27% 7.84% 2.07% -0.11% 3.81% Semi-Annual ETF Equity World Other 2
[DRUG] BetaShares Global Healthcare ETF - Currency Hedged 29.34 2.42 0.57% 0.29% 6.42% 12.44% 15.10% 3.29% Semi-Annual ETF Equity World Other 2
[FOOD] BetaShares Global Agriculture Companies ETF - Currency Hedged 20.13 2.41 0.57% 0.36% 9.82% 5.24% 4.38% 3.28% Semi-Annual ETF Equity World Other 2
[FUEL] BetaShares Global Energy Companies ETF - Currency Hedged 35.89 6.60 0.57% 0.29% 11.55% 1.81% 18.65% 2.16% Semi-Annual ETF Equity Global Resources 2
[GDX] Market Vectors Gold Miners ETF 64.57 5.65 0.53% 0.32% 7.45% -15.09% -11.91% 0.75% Annual ETF Equity Global Resources 2
[HACK] Betashares Global Cybersecurity ETF 126.04 32.60 0.67% 0.20% 15.35% 10.49% 41.22% 4.33% Semi-Annual ETF Equity Global Technology 3
[IXI] iShares Global Consumer Staples ETF (AU) 107.32 -5.10 0.47% 0.30% 3.04% 4.63% 9.60% 1.94% Semi-Annual ETF Equity World Other 3
[IXJ] iShares Global Healthcare ETF (AU) 546.69 -18.95 0.47% 0.20% 5.24% 13.93% 23.41% 1.08% Semi-Annual ETF Equity World Other 3
[MNRS] BetaShares Global Gold Miners ETF - Currency Hedged 4.80 0.69 0.57% 0.72% 11.39% -17.99% -21.04% 0.00% Semi-Annual ETF Equity Global Resources 1
[ROBO] ETFS ROBO Global Robotics and Atmtn ETF 134.47 24.14 0.69% 0.20% 10.67% 6.65% 17.92% 1.67% Annual ETF Equity World Mid/Small 3
Equities - Strategy
[ETHI] BetaShares Global Sstnbty Leaders ETF 247.58 22.89 0.59% 0.20% 5.74% 8.27% 27.59% 1.67% Semi-Annual ETF Equity World Large Blend 3
[MOAT] Market Vectors Morningstar Wide Moat ETF 72.82 8.16 0.49% 0.25% 8.80% 9.58% 27.00% 0.76% Annual ETF Equity North America 3
[QMIX] SPDR MSCI World Quality Mix 9.12 0.03 0.40% 0.24% 6.04% 7.48% 20.59% 2.34% Semi-Annual ETF Equity World Large Blend 2
[TECH] ETFS Morningstar Global Technology ETF 75.92 14.20 0.45% 0.18% 17.99% 8.47% 36.30% 5.13% Semi-Annual ETF Equity Global Technology 3
[WDIV] SPDR S&P Global Dividend ETF 190.52 12.97 0.50% 0.17% 4.88% 3.53% 12.46% 7.69% Semi-Annual ETF Equity World Large Value 3
[WDMF] iShares Edge MSCI World Multifactor ETF 155.51 80.81 0.35% 0.24% 23.04% 5.55% 19.26% 3.13% Semi-Annual ETF Equity World Large Blend 3
[WRLD] BetaShares Managed Risk Global Share 36.08 5.22 0.54% 0.26% 11.08% 6.84% 16.78% 1.43% Annual MF Multisector Aggressive NR
[WVOL] iShares Edge MSCI World Minimum Volume ETF 17.98 7.07 0.30% 0.56% 17.34% 6.01% 17.20% 4.39% Semi-Annual ETF Equity World Large Blend 2
[MOGL] Montgomery Global Equities (Managed Fd) 94.50 10.61 1.32% 0.45% 7.19% 1.74% 0.00% 2.37% Semi-Annual MF Equity World Large Blend NR
[ESGI] VanEck Vectors MSCI International Sustainability Equities ETF 11.29 6.55 0.55% 0.34% 28.19% 7.01% 0.00% 0.44% Annual ETF Equity World Large Blend 2
[VMIN] Vanguard Global Minimum Volatil Act ETF 5.85 3.72 0.28% 0.38% 38.95% 2.68% 0.00% 0.00% Quarterly ETF Equity World - Currency Hedged 2
[VVLU] Vanguard Global Value Equity Active ETF 11.33 4.94 0.28% 0.46% 28.39% 3.93% 0.00% 5.09% Quarterly ETF Equity World Large Value 2
[ACDC] ETFS Battery Tech and Lithium 1.03 1.03 0.82% 0.34% 406.03% 0.00% 0.00% 0.00% Annual ETF Equity Global Resources 1
[VESG] Vanguard Ethically Conscious International Shares Index ETF 1.01 1.01 0.18% 0.26% 32.62% 0.00% 0.00% 0.00% Quarterly ETF Equity World Large Blend 2
[WCMQ] WCM Quality Global Growth Fund (managed fund) 49.70 49.70 1.35% 0.44% 10.34% 0.00% 0.00% 0.00% Semi-Annual MF Equity World Large Blend NR
[RBTZ] BetaShares Global Rbtc & Artfcl Intlgc ETF 2.04 2.04 0.57% 0.28% 526.65% 0.00% 0.00% 0.00% Annual ETF Equity World Large Blend 1
Source: ASX and Morningstar

 

Glossary

Bid-offer spread: is the bid offer spread is the difference between the highest price that a buyer is willing to pay and the lowest price a seller is willing to sell at.

Commodity: A raw material or primary agricultural product that can be bought and sold.

Currency Hedging: is a risk management technique companies can use to hedge their foreign exchange risk usually using forward contracts and options.

Derivative: A derivative is a contract that derives its value from an underlying asset.

Diversified: Diversification is a way of managing risk by investing in a variety of lowly correlated securities.

Domicile: The legal home country of a company.

Equal Weighted: means that each stock is given the same weight in a portfolio.

ETF: An ETF is an investment fund that is traded on a stock exchange, tracking an index.

Floating rate securities: an investment with variable interest payments based on a floating rate.

Flows: The amount of money coming into or out of a fund.

Fully replicating: An ETF that tracks the benchmark index by holding all the stocks in the index.

Funds under Management (FUM): The market value of the assets which a fund manages on behalf of investors.

Hidden liquidity: refers to the stock of units held by the Market Makers. Their job is to ensure sufficient liquidity is available during market hours around the ETFs NAV. It is referred to as ‘hidden’ as they will tend to only place volume on the screen as required.

Leverage: using debt to finance assets.

Liquidity: describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.

Managed Funds (MF): if you invest in a managed fund your money, along with those of other investors will be collectively invested by an investment team in various assets.

Management Expense Ratio (MER): A fee charged to the assets of a fund used to pay for the costs of running the fund.

Market Capitalisation: The number of shares outstanding multiplied by the share price

Multisector aggressive: Funds that invest in a number of sectors and are heavily weighted towards growth assets

Multisector asset allocation: Funds that invest across a number of sectors.

On screen liquidity: simply refers to the publicly quoted bid and offers you see when you look at a trading screen.

Optimised/partially replicating: As opposed for fully replicating, partially replicating ETFs track the benchmark index without holding all the stocks in the index.

PDS: product disclosure statement is a document, or sometimes a group of documents, that contains information about a financial product including any significant benefits and risks, the cost of the financial product and the fees and charges that the financial product issuer may receive.

Prospectus: A Prospectus is a formal legal document that is issued upon on listing on an exchange. It outlines how the raised money will be used and should contain all the information required for investors to make an informed decision.

Security: a tradeable financial asset.

Separately Managed Account (PMA): Unlike a managed fund, a PMA is not a pooled investment. A Professionally Managed Account (PMA) is an investment portfolio managed by our investment team that is unique and tailored to your individual needs. Under a PMA, you hold legal ownership and the underlying securities are registered under your name.

Spread: The difference between the price at which someone is willing to buy a security and the price at which someone is willing to sell a security

Star Rating: InvestSMART’s star rating is a measure of key quantifiable metrics for ETFs: size, fees, liquidity, spread, tracking error

Structured Products (SP): This refers to a security or derivative which gives financial exposure to the performance of an underlying instrument. Types of structured products include Exchange Traded Commodities (ETCs) and Exchange Traded Notes (ETNs).

Tracking difference: The difference in returns of ETF to its Benchmark for a given period

Tracking error: refers to the volatility of the tracking difference

Underlying liquidity: refers to the liquidity in the underlying market that the ETF is designed to track. Underlying liquidity is the most important measure of liquidity when reviewing an ETF. You will find that the less liquid the underlying index, the wider the on-market bid-ask spread tends to be to account for the transactional costs involved in dealing.

Yield: The income return on an investment, such as interest or dividends received from holding it. Yield is usually expressed as an annual percentage rate.

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IMPORTANT: This information is general advice only and has been prepared without considering your financial situation or objectives and you should consider if the information is appropriate for your circumstances before making an investment decision. Before acting on this information, please ensure that you read all relevant disclosure documents, including but not limited to, the Product Disclosure Statement (PDS) and Financial Services Guide (FSG). You may wish to speak to a financial advisor for further guidance. Numerical gures presented are accurate at the time of preparation and where required, further disclosure will be appropriately provided. Past performance cannot be relied upon for future performance. Information presented, gures quoted and diagrams are accurate as at 31 December 2017. Exchange listed managed funds are included in this report but not rated. Before making any investment decisions, please read the latest PDS provided by each ETF issuer and check all relevant ETF fees, as they are subject to change without notice.


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