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$3tn milestone at the end of May according to research from London-based ETFGI. At the end of May 2015, the global ETF/ETP industry had 5,757 ETFs/ETPs, with 11,117 listings, from 256 providers listed on 62 exchanges in 51 countries.
ASX CASH & BOND ETFs*
|NAME||SYMBOL||CLOSE PRICE||1m (%)||1y (%)||MER (%)||FUND SIZE ($m)|
|BetaShares Aust High Int Cash||AAA||50.12||0.23||3.24||0.18||770.71|
|SPDR S&P/ASX Aust Bond||BOND||25.9||-1.22||9.3||0.24||15.68|
|SPDR S&P/ASX Aust Govt Bond||GOVT||25.76||-1.38||9.82||0.22||5.18|
|iShares Composite Bond ETF||IAF||105.89||-1.12||8.72||0.24||183.98|
|iShares Treasury ETF||IGB||104.98||-1.5||9.38||0.26||16.49|
|iShares Govt Inflation ETF||ILB||113.6||-2.03||13.49||0.26||32.26|
|Russell Aust Select Corp Bond ETF||RCB||20.32||-0.35||5||0.28||79.46|
|Russell Aust Govt Bond ETF||RGB||21.17||-1.74||11.59||0.24||133.24|
|Russell Aust Semi-Govt Bond ETF||RSM||20.64||-0.82||7.42||0.26||125.78|
|Vanguard Aust Fxd Int Index ETF||VAF||49.71||-1.1||8.93||0.2||199.64|
|Vanguard Aust Govt Bond Index ETF||VGB||48.47||-1.3||9.55||0.2||49.07|