10 Aug – 14 Aug 2015

Share

[private role=’subscriber’]

Last week there was a net inflow of $1.2m bond ETFs surveyed by YieldReport. The largest flow was to the BetaShares High Interest Cash fund but in percentage terms the flow was quite modest, with the largest percentage inflow going into iShares UBS government Inflation Index fund, which gained nearly 1% in funds under management.
The only fund to show any meaningful outflow was the Russell Australian Semi-Government Bond fund which lost a little under 0.50% of the fund value.
In recent months famous investors such as Bill Gross and Carl Icahn have criticised ETFs on the grounds of potential liquidity problems. George Soros has voted his approval for the structure by switching some direct Chinese investments to index ETFs

Soros uses ETFs to switch from active to passive
George Soros is famous for forcing the Bank of England out of the European Exchange Rate Mechanism (the forerunner to the euro) and he has been long recognised as one of the world’s sharpest investors. Recently, he almost totally sold out of Chinese internet companies Alibaba and Baidu but he maintained an exposure to Chinese markets by buying units in iShares China Large Cap ETF and iShares MSCI Emerging Markets ETF which are both unhedged for currency. His move is an interesting one given the criticism of liquidity in ETFs in recent times by Bill Gross and Carl Icahn.

ASX CASH & BOND ETFS*

NAMESYMBOLCLOSE
PRICE
1m (%)1y (%)MER (%)FUND
SIZE ($m)
BetaShares Aust High Int CashAAA50.140.213.030.18706.06
SPDR S&P/ASX Aust BondBOND26.021.416.880.2415.78
SPDR S&P/ASX Aust Govt BondGOVT25.901.537.240.225.22
iShares Composite Bond ETFIAF105.361.296.510.24222.67
iShares Treasury ETFIGB103.261.406.660.2616.24
iShares Govt Inflation ETFILB114.101.517.520.2636.97
Russell Aust Select Corp Bond ETFRCB20.34n/a4.510.2885.65
Russell Aust Govt Bond ETFRGB21.25n/a8.180.24144.28
Russell Aust Semi-Govt Bond ETFRSM20.63n/a5.980.26118.09
Vanguard Aust Fxd Int Index ETFVAF49.77n/an/a0.2224.91
Vanguard Aust Govt Bond Index ETFVGB48.83n/an/a0.253.38
*1m/1y performance as at end of July 2015. Closing price as at week end. Return in AUD before Fees

[/private]