Exchange Traded Funds (ETFs) on the ASX have grown to a $70 billion industry. Here’s a guide on the ASX ETF sector and what investors need to know. 

 

Key points

  • ETFs are managed funds, listed on stock exchanges that invest in various financial assets
  • The ASX has over 140 ETFs and the industry is worth $71.4 billion as of mid-October
  • Average ASX-listed ETF is up 9 per cent in 2020 but technology focused ETFs are significantly outperforming
  • People invest in ETFs to gain broader exposure to assets otherwise difficult to access or lower investing costs
  • Industry experts warn investors need to do proper due diligence beyond an ETF’s mere name

 

What are ETFs?

ETFs work similarly to managed funds which invest in various financial assets including shares, bonds, infrastructure and in some cases even other ETFs. Among shares, ETFs can invest in shares of particular countries’ exchanges (such as the NASDAQ), a sector (such as defence) or to track an index (like the ASX 200).

They are managed by portfolio managers from financial institutions which buy and sell stocks on a regular basis. Australia’s biggest ETF providers include BetaShares, VanEck and iShares.

Unlike traditional unlisted funds they can be bought and sold through an exchange.

 

The ETF market

According to BetaShares, the ETF investor population in Australia in 2019 reached 455,000, which is 18 per cent higher than last year.

Of the investor population, 43 per cent are millennials, although the average age is 42. While the industry is still skewed 76/24 per cent towards males, this is an improvement from five years ago when it was 89/11 per cent.

Currently 30 per cent of ETF investors hold it through their self-managed super fund, whereas back in 2008 this figure was higher at 51 per cent. More investors are now buying and selling them directly.

There are over 140 ETFs on the ASX and the industry is worth $71.4 billion as of mid-October.

According to Betashares this is up 27 per cent from 12 months prior and monthly net inflows surpassed $2 billion for the first time.

 

Here’s a list of all ASX ETFs and their YTD performance in 2020…

Swipe or scroll to reveal the full table. Click headings to sort.

CODE Name Price (1-Dec) 30D Vol YTD Rtn Fund Assets ($M)
ASIA BetaShares Asia Technology Tig 10.96 0 +56.70% 448.24
ACDC ETFS Battery Tech and Lithium 78.65 11.54k +55.33% 58.09
RBTZ BetaShares Global Robotics And 13.7 0 +37.75% 87.13
NDQ BetaShares NASDAQ 100 ETF 13.7 0 +32.80% 1366.25
TECH ETFS Morningstar Global Techno 99.08 9.90k +31.66% 224.93
CNEW Vaneck Vectors China New Econo 8.95 134.54k +30.63% 154.33
CURE ETFS S&P Biotech ETF 69.2 4.05k +26.99% 27.51
PAXX Platinum Asia Fund ETF 5.51 0 +26.70% 166.86
ROBO ETFS ROBO Global Robotics and 79.14 6.56k +26.27% 168.11
WCMQ WCM Quality Global Growth Fund 7.46 0 +25.72% 163.8
ETHI BetaShares Global Sustainabili 10.84 345.99k +23.65% 986.71
HACK BetaShares Global Cybersecurit 8.04 0 +22.16% 311.81
INES Intelligent Investor Ethical S 3.17 14.57k +20.89% 7.58
IAA iShares Asia 50 ETF/AU 111.56 0 +20.52% 702.25
MNRS Betashares Global Gold Miners 6.27 108.70k +19.15% 56.76
IKO iShares MSCI South Korea ETF/A 105.31 0 +18.86% 56.35
IMPQ eInvest Future Impact Small Ca 5.14 0 +17.05% 2.27
CETF Vaneck Vectors FTSE China A50 70.05 3.12k +16.79% 23.91
QLTY BetaShares Global Quality Lead 21.07 0 +13.52% 98.17
MVE Vaneck Vectors S&P/ASX Midcap 32.7 22.88k +13.03% 166.25
VAE Vanguard FTSE Asia ex-Japan Sh 75.89 0 +12.98% 231.48
HJPN BetaShares Japan ETF - Currenc 14.52 32.45k +12.94% 51.86
QHAL Vaneck Vectors MSCI World ex A 33.51 48.54k +12.46% 263.74
VSO Vanguard MSCI Australian Small 62.83 17.32k +12.03% 389.82
QUAL Vaneck Vectors MSCI World ex A 33.98 145.41k +11.75% 1424.18
EMMG Betashares Legg Mason Emerging 6.66 0 +11.69% 14.25
FEMX Fidelity Global Emerging Marke 6.12 0 +10.75% 122.39
SMLL BetaShares Australian Small Co 3.78 16.48k +10.75% 44.6
GGUS BetaShares Geared US Equity Fu 23.8 140.70k +10.47% 76.63
VESG Vanguard Ethically Conscious I 61.89 16.10k +10.01% 151.79
GDX VanEck Vectors Gold Miners ETF 47.22 41.63k +9.72% 484.99
IHVV iShares S&P 500 AUD Hedged ETF 433.03 10.74k +8.79% 663.85
IHOO iShares Global 100 AUD Hedged 131.2 2.09k +8.49% 100.38
IVV iShares Core S&P 500 ETF/Austr 496.96 16.56k +8.25% 3568.49
IOO iShares Global 100 ETF/AU 82.83 0 +8.08% 1948.33
MSTR Morningstar International Shar 9.75 24.61k +7.61% 101.78
IJP iShares MSCI Japan ETF/AU 89.1 0 +7.38% 325.74
VGAD Vanguard MSCI Index Internatio 81.11 69.70k +7.35% 1156.47
WXHG SPDR S&P World ex Australia He 24.7 0 +7.03% 111.31
AGX1 Antipodes Global Shares EQMF E 5.85 4.35k +6.76% 0
WXOZ SPDR S&P World ex Australia Fu 16.38 0 +6.46% 215.95
SSO SPDR S&P/ASX Small Ordinaries 35.99 0 +6.44% 24.9
VGS Vanguard MSCI Index Internatio 85.08 94.56k +6.29% 2334.53
MHG Magellan Global Equities Fund 3.63 374.95k +6.18% 270.53
ISO iShares S&P/ASX Small Ordinari 5.24 0 +6.08% 110.53
MOAT VanEck Vectors Morningstar Wid 83.65 8.02k +6.06% 260.4
IEM iShares MSCI Emerging Markets 67.02 0 +6.04% 838.79
ESGI VanEck Vectors MSCI Internatio 25.62 9.42k +5.30% 53.14
VDBA Vanguard Diversified Balanced 56.56 0 +5.18% 290.15
VDGR Vanguard Diversified Growth In 56.69 0 +5.13% 290.96
IZZ iShares China Large-Cap ETF/Au 64.06 16.58k +4.99% 129.5
VGE Vanguard FTSE Emerging Markets 72.38 0 +4.92% 411.41
VDHG Vanguard Diversified High Grow 57.13 0 +4.82% 524.72
FAIR BetaShares Australian Sustaina 18.75 0 +4.66% 766.76
VDCO Vanguard Diversified Conservat 55.96 0 +4.44% 127.53
IHWL iShares Core MSCI World All Ca 38.57 0 +4.35% 224.24
IWLD iShares Core MSCI World All Ca 39.13 0 +4.29% 136.94
WEMG SPDR S&P Emerging Markets Fund 23.63 0 +3.87% 20.71
PIXX Platinum International Fund ET 4.74 0 +3.76% 303.19
IIND Betashares India Quality ETF 8.7 0 +3.55% 31.11
VISM Vanguard MSCI International Sm 55.1 14.28k +3.49% 56.39
MGE Magellan Global Equities Fund 3.87 840.83k +3.41% 1766.69
DRUG BetaShares Global Healthcare E 6.85 63.24k +2.86% 71.24
IXJ iShares Global Healthcare ETF/ 101.3 19.94k +2.62% 787.27
GRNV VanEck Vectors MSCI Australian 26.04 13.54k +2.34% 68.79
FOOD BetaShares Global Agriculture 6.03 10.78k +1.92% 20.56
IJH iShares Core S&P Mid-Cap ETF/A 296.83 2.09k +1.88% 146.23
INIF Intelligent Investor Aus Equit ijr 99.38k +1.78% 43.5
VAS Vanguard Australian Shares Ind 84.44 301.77k +1.64% 5999.43
STW SPDR S&P/ASX 200 Fund 61.45 0 +1.43% 4155.38
MVW VanEck Vectors Aus Equal Weigh 30.81 0 +1.40% 1400.1
IOZ iShares CORE S&P/ASX 200 ETF 27.07 0 +1.38% 3691.1
A200 BetaShares Australia 200 ETF 110.85 0 +1.34% 1002.33
WDMF iShares Edge MSCI World Multif 34.76 0 +1.12% 187.32
QRE BETASHARES AUSTRALIAN RESOURCE 6.53 0 +1.02% 67.08
QMIX SPDR MSCI World Quality Mix Fu 21.81 3.40k +0.60% 24.31
OZR SPDR S&P/ASX 200 Resources Fun 11.7 0 +0.52% 103.03
ILC iShares S&P/ASX 20 ETF 25.07 0 +0.46% 353.89
EX20 BetaShares Australian Ex-20 Po 18.8 0 +0.37% 158.78
VLC Vanguard MSCI Australian Large 66.3 3.05k +0.22% 104.76
VHY Vanguard Australian Shares Hig 56.9 53.63k +0.15% 1347.28
MVR VanEck Vectors Australian Reso 29.09 10.58k +0.07% 105.91
MVS VanEck Vectors Small Companies 20.05 0 -0.27% 79.7
WRLD BetaShares Managed Risk Global 13.53 0 -0.46% 61.55
IXI iShares Global Consumer Staple 78.22 5.98k -0.66% 119.47
IJR iShares Core S&P Small-Cap ETF 116.81 8.34k -0.69% 221.7
EMKT Vaneck Vectors Msci Multifacto 19.74 15.94k -0.73% 39.58
SYI SPDR MSCI Australia Select Hig 27.86 0 -0.74% 199.89
QOZ BetaShares FTSE RAFI Australia 13.26 63.66k -0.87% 288.83
IVE iShares MSCI EAFE ETF/AU 96.96 7.55k -1.10% 385.86
QUS BetaShares FTSE RAFI U.S. 1000 36.71 12.06k -1.20% 60.53
SFY SPDR S&P/ASX 50 Fund 58.82 21.43k -1.67% 692.32
HVST BetaShares Australian Dividend 13.5 20.97k -2.11% 132.47
MVB VanEck Vectors Australian Bank 24.56 24.27k -2.38% 116.23
MVOL iShares Edge MSCI Australia Mi 28.16 0 -2.48% 70.12
EIGA eInvest Income Generator Fund 3.53 0 -2.56% 19.94
ST BetaShares Managed Risk Austra 16.45 31.14k -2.56% 39.94
YMAX BetaShares Australian Top 20 E 7.55 0 -2.91% 269.97
HEUR BetaShares Europe ETF - Curren 11.65 51.06k -3.08% 33.85
SWTZ Switzer Dividend Growth Fund 2.4 34.85k -3.12% 73.88
ESTX ETFS EURO STOXX 50 ETF 67 0 -3.37% 47.64
VAP Vanguard Australian Property S 83.75 0 -3.84% 1567.67
VEQ Vanguard FTSE Europe Shares ET 56.49 0 -4.07% 173.28
WVOL iShares Edge MSCI World Minimu 32.15 0 -4.18% 114.94
NDIA ETFS Reliance India Nifty 50 E 47.65 847.6 -4.26% 12.97
VBLD Vanguard Global Infrastructure 55.17 0 -4.40% 101.45
SLF SPDR S&P/ASX 200 Listed Proper 12.31 0 -4.52% 592.66
IEU iShares Europe ETF/AU 63.34 48.06k -4.54% 549.85
QFN BetaShares S&P/ASX Financial S 9.99 0 -4.54% 39.84
RARI Russell Invest Aust Responsibl 23.16 0 -4.63% 265.34
UMAX BetaShares S&P 500 Yield Maxim 18.79 9.00k -4.92% 88.98
OZF SPDR S&P/ASX 200 Financials Ex 18.08 0 -4.92% 113.47
VMIN Vanguard Global Minimum Volati 54.62 0 -4.94% 11.16
MOGL Montgomery Global Equities Fun 3.42 0 -4.94% 86.08
EINC BetaShares Legg Mason Equity I 7.94 8.90k -5.29% 27.8
MVA VanEck Vectors Australian Prop 22.75 0 -5.32% 414.54
IHD iShares S&P/ASX Dividend Oppor 12.82 0 -5.64% 264.88
RDV Russell Invest High Div Aust S 26.57 0 -5.70% 274.29
SELF SelfWealth SMSF Leaders ETF 45.49 328.37 -5.81% 99.15
IFRA VanEck Vectors FTSE Global Inf 19.89 63.40k -5.87% 315.67
VGMF Vanguard Global Multi-Factor A 50.31 0 -6.58% 17.21
MICH Magellan Infrastructure Fund - 2.86 578.94k -8.64% 660.58
RENT AMP Capital Global Property Se 2.63 0 -10.07% 18.77
VVLU Vanguard Global Value Equity A 44.5 0 -10.15% 32.56
RINC BetaShares Legg Mason Real Inc 8.42 17.89k -10.91% 47.6
GLIN AMP Capital Global Infrastruct 2.72 0 -11.22% 23.06
BEAR BetaShares Australian Equities 10.59 0 -11.33% 79.34
REIT Vaneck Vectors FTSE Internatio 16.99 17.38k -14.25% 66.46
ZYUS ETFS S&P 500 High Yield Low Vo 10.74 0 -15.50% 69.49
ZYAU ETFS S&P/ASX 300 High Yield Pl 9.12 0 -15.85% 104.22
WDIV SPDR S&P Global Dividend Fund 16.29 0 -15.91% 276.46
F100 Betashares FTSE 100 ETF 8.75 0 -16.15% 206.3
DJRE SPDR Dow Jones Global Real Est 19.23 94.87k -16.92% 337.3
INCM BetaShares Global Income Leade 12.91 0 -19.93% 17.65
BNKS BetaShares Global Banks ETF - 5.38 54.49k -21.12% 31.9
CORE ETFS Global Core Infrastructur 45.79 2.69k -22.01% 18.59
FUEL Betashares Global Energy Compa 3.65 478.45k -32.23% 262.36
BBOZ BetaShares Australian Equities 6.27 3.74M -35.26% 356.61
BBUS BetaShares US Equities Strong 1.67 8.40M -44.06% 299.26

 

Performance of ASX ETFs in 2020

In 2020 the average ASX ETF is up 9 per cent but there is a big gap between the best and the worst performing ETFs.

“If you look at it [ETF returns] based on performance, generally it’s been the growth areas that’ve performed very well,” ETF Securities’ Kanish Chugh told Stockhead.

“You generally see when you look at the top 5-10 best performers its been around that space looking at robotics and automation, technology, battery technology.”

“The biotech sector is another. With COVID there’s been this big push into healthcare and biotech is seen as the driver of performance of healthcare,” he said.

One particular ETFs Chugh named was the ETFS Battery Tech & Lithium ETF (ASX:ACDC) which is up 55 per cent in 2020 according to Bloomberg. It is the second best performer behind the BetaShares Asia Technology Tigers ETF (ASX:ASIA), up 57 per cent.

Other top performong ETFs on these themes include both ETFS and BetaShares’ Robotics funds which are up 26 per cent and 38 per cent respectively and BetaShares’ NASDAQ 100 ETF (ASX:NDQ) which has gained 33 per cent.

 

Inflows to ASX ETFs

However if you look at ASX ETFs by their inflows, there is a different story.

“The top 2 largest funds that have attracted inflows have been your broader Australian benchmarks ETFs in the Vanguard and IShares fund,” Chugh said.

“Because a lot of investors when they’re want to enter the market but see volatility they want to get out of direct stocks,” he said.

There was also interest in short and leveraged products but 3rd largest inflow was into gold.

“With interest rates and yields being so low and further pressure because of the shake up to the economy because of COVID-9 we actually saw investors look outside of fixed income and look beyond traditional asset classes,” Chugh explained.

“More recently hasn’t been seen as a place for investors because it does not produce income – it is very much a defensive asset.”

But he said it was actually the outflow side that was most interesting.

Despite the US market performance the 2nd largest outflow of the year was from the iShares S&P 500 fund. Chugh observed this was likely because investors did not want too broad an exposure to the US market.

 

Why do people invest in ETFs?

According to BetaShares’ most recent Annual ETF report, the most common reasons investors used ASX ETFs were diversification (over 75 per cent), lower cost (64 per cent) and access to overseas markets (57 per cent).

ETFs can suit a wide range of investment styles and offer access to a wide variety of sectors – some of which may be difficult to invest in.

Examples include exposure to American, European and Asian market indices, currency fluctuations and sector thematics.

“You won’t get blown up by one stock that falls 80 per cent or something like that – and it’s important for a long term investor you get that diversification,” Morningstar senior analyst Matthew Wilkinson told Stockhead earlier this year.

 

Lower costs

It goes without saying ETFs have potential to be more cost-effective than buying several stocks on your own and has the similar effect of not putting all your eggs in one basket.

One trait of traditional unlisted funds is high fees. Hedge funds for example charge management and performance fees – the former is typically a percentage of a fund’s net asset value and ranges from 1 to 4 per cent per annum.

ETF providers globally have engaged in a race to provide the lowest cost to investors.

One US institution Salt Financial went even further and launched an ETF that temporarily gave investors 50c back for every $US1,000 ($1,444) in its fund up to $100 million. In effect, Salt paying them to invest.

 

What are the risks?

As with any financial product, ASX ETFs are not without risks and pitfalls. Many of these stem from misconceptions about ETFs.

It is easy to sit back and relax thinking the portfolio managers will handle everything for you and if the market crashes you can quickly sell out, but this may not be the case.

As with any financial product you should seek advice before making any financial product decisions beyond the mere name of the product.

This may seem common sense in theory but isn’t in practice. For instance one US ETF – The Herzfeld Caribbean Basin Fund (NDQ:CUBA) – rallied upon the death of Cuban dictator Fidel Castro’s despite having nothing to do with the Carribean nation.

“Don’t judge an ETF’s name as being what that exposure is – do a little homework and look at what’s underlying,” Chugh says.

“The simple name of an ETF may not provide enough of an insight to tell investors exactly what they’re getting exposure to.

Chugh also warns “no two ETFs are twins”.

“Take the European equity market for example – there are 4 of 5 European equity [ETFs] here and each of them are different to each other and each is tracking a different index or benchmark,” he said.

Other traits Chugh says investors need to do their homework on are ETF fees and liquidity – both on and off market.

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