Australian ETF News
Betashares to expand into private credit ETFs. Betashares expects its private asset business to launch by offering investors access to private credit products in the United States. While the details have yet to be finalised, Betashares said the first funds would be highly diversified and very cost-effective strategies. Interest from ASIC has not dulled demand for private credit, although some financial advisors have become wary. Last week, one of the sector’s biggest players, Metrics Credit Partners, said it raised $315 million for its flagship listed fund amid strong demand. There is more than $259 billion invested in ETFs listed in Australia, a 33% increase in the 12 months to April 30. BetaShares has been the second-most popular ETF provider for the year to the end of April, accounting for about 27% of inflows.
Australian ETF investors are allocating more money to bitcoin than gold in a major rotation that points to growing acceptance of the world’s largest cryptocurrency as a store of value and portfolio hedge amid the volatility of Donald Trump’s trade war. Australian bitcoin ETFs attracted $87.3 million last month, far exceeding the $1.5 million that flowed into gold bullion ETFs. Bitcoin ETFs in the US attracted more than $US9 billion in capital over the five weeks to May 29 including $US6.35 billion flowing into BlackRock’s Bitcoin Trust. That was its largest ever month of inflows. Here’s the only sensible thing we know about Bitcoin and gold: they are distinct asset classes. The two have a negative correlation in ETF flows – when money moves into one, it tends to flow out of the other. That’s consistent with how investors position them; gold is a defensive, risk-off asset, and bitcoin is a high-conviction, risk-on bet.
US ETF Flows by Asset Class
The value of ETF flows data is relatively obvious – it highlights asset class inflows and outflows. As such, it illustrates investor asset class preferences at any given time. Relative to the ASX data, which is monthly, US data is available on both a more frequent and timely basis. The data below is as at 29 May 2025.
US ETF Flows Focus
US Long-end Treasuries ETFs – Retail Investors keep Piling in to take that Yield & Convexity. The iShares 20+ Year Treasury Bond ETF (TLT) is one of the most popular options for investors seeking to establish exposure to long-dated Treasuries, an asset class that is light on credit risk but may offer attractive yields thanks to an extended duration and therefore material interest rate risk. For those looking to extend the duration of their portfolio and potentially enhance the current return offered, TLT can be a useful product.
The retail trade has been clashing with the institutional trade pretty much all of 2025 and particularly since early April. While insto investors have shunned the US treasuries long-end, TLT has taken in billions of dollars over the past couple of weeks. And for some this has been a widow maker trade. It feels like yields, long end yields in particular have just been on a roller coaster. So how do you explain just this off the charts demand still for long end bonds in particular, and from retail investors?
In short, there seems to be an insatiable demand when long bonds and the 10-year bond hits 5% and retail investors just keep hoovering them up. It’s actually served to limit the 30-year moving meaningly above 5.0%, or at least sustainably so.
But how can you explain this concept of buying TLT, yielding 5%, when you can get almost the same yield in a money market fund or the short end of the curve, specifically circa as high as 4.7%. Why bother with the duration risk? Or is this a bet on the Fed? Yes, it’s the latter. The long-end gives you convexity, the short-end doesn’t. And at some point the Fed will begin cutting rates.
And furthermore, while the Insto market is focusing on the belly of the curve, 3- to 7-year, the retail investors are not. The attitude appears to be ‘if I’m going to take risk, I want to take more risk’. Anyway, so far this year it has been a one-zero scoreline of retail investors (the ‘dumb money’) over institutional investors (the ‘smart money’). We can see the merit in the trade. To our mind, the probability of the 30-year yield being below 5% is higher than being above. You get a higher yield, and you get an extra kicker from the convexity when the Fed inevitably starts cutting again.
Global Select ETF Launches
New issue ETFs reflect ‘real-time’ investment theme investor sentiment. i.e, what’s ‘hot’. Additionally, the largest Australian ETF issues are all part of large international entities. And often what ETF is issued in their home markets and, to some degree, subsequently issued in Australia.
Regarding the table below, there are several distinct themes reflecting investor preferences currently:
- Fixed Income – Go Active, Not Passive – The release of the JPMAM fixed income ETF is reflective of how fixed income should be done – active management not passive. By 2030, JPMAM forecasts that the global fixed income ETF market will grow to USD6 trillion (33% growth from 2024 year-end), with active fixed income ETFs expected to be a key driver for the overall ETF industry.
- European Defense ETFs – this sector has been a tear this year and which includes a host of ETF launches. Such ETFs provide an opportunity to tap into the growing European defense sector, which is expected to benefit from increased government spending on defense and security.
- The Invesco Global Enhanced Equity UCITS ETF is a factor based strategy, a strategy that we believe Australian investors do not pay enough attention to. For example, in the US 1Q25, outperformance was all largely factor-based.
| Figure 3: Select ETF Launches, for May 22nd to 28th 2025 |
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| Select European ETF Launches |
| J.P. Morgan Asset Management launches Global IG Corporate Bond Active UCITS ETF |
| BNP Paribas Asset Management launches Europe defence ETF |
| Global X ETFs Europe launches Global X Europe Focused Defence Tech UCITS ETF |
| Invesco launches ETF with systematic active approach for outperforming global equities |
| Select US ETF Launches |
| Tidal ETFs launched the Alpha Brands Consumption Leaders ETF |
| Simplify Asset Management launched the Simplify Kayne Anderson Energy and Infrastructure Credit ETF |