ASX ETP Analysis — May 2020

Published in

Prosperity Advisers DnA

6 min readJun 9, 2020

Intro

Welcome to the 1st edition of this report which analyses the various ETP’s listed on the ASX. ETP refers to Exchange Traded Product and includes ETFs (Exchange Traded Funds), Indexes and other Exchange Traded Products.

In this initial version of the report we’ll focus on 4 specific areas of Performance, Spread, Inflows/Outflows and FUM.

The ASX dataset has a lot more information covering statistics such as Management Expense Ratios, Historic Yields and other.

Note: This information is not investment advice. It only looks at past performance based on new data from the ASX. It is meant to be an informative look at what has happened and to showcase the power of data visualisation and analytics. For financial advice, please contact your financial adviser or get in touch with the Financial Services team at Prosperity here: LINK

New additions

There were 3 new additions for the month of May to the ETP list. These were:

iShares Core Corporate Bond ETF (ICOR)
iShares Yield Plus ETF (IYLD)
BetaShares Global Gov Bond 20+ Yr ETF (GGOV)

Overall Comment

Strong rebound for oil related funds and more money flowing into Australian equity related ETF’s and out of cash were some of the key observed themes this month. Whilst BetaShares funds are at the high and low end of the scale in terms of performance, on average they were overall positive for the month.

Performance

This section looks at share price returns and whilst past performance may look good, it’s best to remember that this does not indicate how these funds will perform in the future. Whilst we focus on 1-month and 1-year returns here, the ASX statistics also showcase 3-year and 5-year performance too.

1-month returns

Each ETP falls into a classification category. For the month of May 2020, the top performance by ETP category were:

Equity — Australia Small/Mid Cap: +9.6%
Equity — Australia Sectors: +8.4%

The worst performing were:

Equity — Emerging Markets: -2.6%
Equity — Asia: -1.1%

Breaking down the individual ETP performances and the top rated performers (on a 1-month returns basis) were:

OOO — BetaShares Crude Oil Index: +25.8%
ATEC — BetaShares S&P/ASX Australian Technology ETF: +14.6%

The worst performing were:

BBOZ — BetaShares Australia Strong Bear (Hedge Fund): -13.4%
FUEL — BetaShares Global Energy Companies ETF — Currency Hedged: -7.1%

1-month versus 1-year performance

Looking at ETP Category performance on our scatter of 1-month vs 1-year shows that ETPMAG (ETFS Physical Silver) did well on a 1-year scale with +13% 1-month returns and +25.4% 1-year returns as at the end of May 2020.

The worst performers were those that did poorly on a 1-month and 1-year scale included FUEL (mentioned earlier) but also BBUS (BetaShares US Equities Strong Bear Currency Hedged) which fell -7.1% on a 1-month basis and is down -34.8% on a 1-year basis.

Provider performance

Looking at how different providers compared we focus this month on BetaShares, ETF Securities and Vanguard

Whilst BetaShares has taken this hit they do have quite a number of funds so looking at all of them on their own we see performance for the month is a respectable +2.5% across 58 funds.

ETF Securities funds performed positively with an average return of +1.7% for the month of May.

Vanguard had similar but slightly lower returns on the month at +1.6%.

Spotlight historic performance

In this section we look at 2 individual ETP’s who have performances worth mentioning.

This month we look at oil related ETP’s which have become interesting with the recent rally in oil. OOO had a big month with the largest returns but this is on the back of taking a hit in the last 4 months posting negative returns prior to May.

Additionally, with many working from home and technology stocks being put more in the spotlight we look at TECH (ETF Securities Morningstar Global Technology ETF) which has had +38.2% returns since November 2018

Spread

Spreads in ETP world refer to the bid-ask spread (the price difference between buyers and sellers). According to the ASX, the spread % in these ETF statistics is equal to the (offer-bid /midpoint as measured from 10.30am — 3.45pm).

Spread is important for investors as this forms a part of trading costs and are often looked at by ETF investors.

For the month of May 2020, the highest recorded spread by ETP Category were:

Commodity: +0.95%
Equity — Australia Small/Mid Cap: +0.5%

The lowest spreads were:

Cash: +0.02%
Equity — Australia: +0.09%

Looking at spread by individual ETP, the highest spreads were across the following:

ETF Securities Physical Palladium: +2.3%
BetaShares Commodities Basket ETF: +1.9%

The lowest spreads were offered by:

iShares Core Cash ETF: +0.01%
BetaShares Australian High Interest Cash ETF: +0.02%

Inflows/Outflows

The ASX showcases what Funds Inflow/Outflow were for the month of May and they define this as representing the number of units changed times the end of month closing price.

In terms of ETP Categories with the highest net inflows were:

Equity — Australia: +$64.1m
Commodity: +$14.24m

The weakest were:

Cash: -$18.4m
Fixed Income — Global: -$2.1m

In terms of individual ETP, the highest net inflows were:

Vanguard Australian Shares Index: +$243.1m
iShares Core S&P/ASX 200 ETF: +149.4m

The lowest were:

BetaShares Australian High Interest Cash ETF: -$56.1m
iShares S&P Global Consumer Staples ETF: -$35.3m

FUM

FUM (funds under management) is shown in the ASX fund statistics in 2 ways, FUM total and FUM change. In this report we check out FUM change which shows where investor funds are flowing to the most (and flowing out from the most too).

In terms of individual ETP’s the highest FUM change values for May 2020 were for the following: