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ETF AUM in Australia hits record highs

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Assets under management of exchange-traded funds in Australia surged 33.3 percent in 2012, according to a record high, according to a new report.

Cerulli Associates publishes this finding in a summary of results from a new report, The Cerulli Edge-Asian Monthly Product Trends Edition, May 2013 Issue.

The report shows that ETFs in Australia grew to A$6.4 billion (U.S. $6.7 billion), fueled in part by the launch last year of 25 new ETFs bringing the total number of ETFs in the country to 85. Equity-related ETFs enjoyed positive new net flows of $388.3 million across 51 ETFs in 2012.

Last year’s performance, the report indicates, continued in the first three months of 2013, despite only one new ETF being launched during the quarter. AUM expanded to a new record high of $7.2 billion by end-March, while net new flows attained $370.5 million. “The robust flows into a relatively stable number of ETFs suggest that more Australians are taking a liking to ETFs,” the report states.

One standout in a market dominated by equity ETFs was BetaShares’ Australian High-Interest Cash ETF, the only money market ETF in Australia. Launched in March last year, this ETF was well ahead of second-ranked Vanguard Australian Shares Index ETF in terms of net new flows for 2012 — A$122.9 million against A$92.1 million. BetaShare’s ETF is also the only ETF in the country that pays a monthly dividend.

Despite the impressive flows and AUM data out of Australia’s ETF space last year, the country’s share of AUM for all ETFs in Asia dropped from 5.7 percent in 2011 to 5.0 percent by end-2012. It was behind Japan (33.6 percent ETF AUM share in 2012), Hong Kong (22.4 percent), China (19.2 percent) and South Korea (9.9 percent).

Cerulli’s research also shows that ETF AUM grew across virtually all markets in Asia in 2012, underscoring their popularity.