01 June – 05 June 2015


Last week was one of contrasts in ETFs with big inflows into Russell Australian Government Bond ETF and the Vanguard Australian Fixed Interest Index ETF. The former saw inflows of $35m while the latter saw inflows of $20.8m. Losers during the week included the BetaShares Australian High Interest Cash ETF with net outflows of $26m and the Russell Australian Semi-government Bond ETF with net outflows of $21.7m.

ASIC worried about synthetic ETFs
ASIC chairman Greg Medcraft says that the rise of synthetic ETFs is reminiscent of the rise of the synthetic collateralised debt obligation pre-GFC. “I saw securitisation emerge as a good … tool to assist the funding of the real economy, but then it all got crazy and wild in the late 2000s,” Medcraft told a Sydney conference. “I must say the emergence of synthetic ETFs troubles me because it has a lot of similarities with synthetic CDOs … You have to question: ‘How do you define an ETF?’ I think there’s a danger of abusing the ‘brand’ ETF,” he said. Plain vanilla ETFs are a “good thing for investors … But it’s not the same – cash and synthetic is not the same. That’s my concern with those,” he said.

ETF growth continues globally
Assets invested in the global ETF/ETP industry broke through the US$3tn milestone at the end of May according to research from London-based ETFGI. At the end of May 2015, the global ETF/ETP industry had 5,757 ETFs/ETPs, with 11,117 listings, from 256 providers listed on 62 exchanges in 51 countries.

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BetaShares Aust High Int CashAAA50.
SPDR S&P/ASX Aust BondBOND25.9-
SPDR S&P/ASX Aust Govt BondGOVT25.76-1.389.820.225.18
iShares Composite Bond ETFIAF105.89-1.128.720.24183.98
iShares Treasury ETFIGB104.98-1.59.380.2616.49
iShares Govt Inflation ETFILB113.6-2.0313.490.2632.26
Russell Aust Select Corp Bond ETFRCB20.32-0.3550.2879.46
Russell Aust Govt Bond ETFRGB21.17-1.7411.590.24133.24
Russell Aust Semi-Govt Bond ETFRSM20.64-0.827.420.26125.78
Vanguard Aust Fxd Int Index ETFVAF49.71-1.18.930.2199.64
Vanguard Aust Govt Bond Index ETFVGB48.47-1.39.550.249.07

*1m/1y performance as at end of April 2015. Closing price as at week end. Return in AUD before Fees