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ETFs hit $6bn
Thursday, 4 October 2012 12:50pm

Growth in Exchange Traded Funds has slowed in the last few years but in the year to end September 2012 they still increased 16% to reach $5.7 billion, according to the ASX.

This FUM is equivalent to about 9% of indexed Australian equities, based on separate research by Rainmaker, but only about 0.5% of stock market capitalisation.

There are five major ETF providers, StateStreet with 48% of the market, iShares with 23%, Vanguard with 9%, and BetaShares and Russell with 3% each.

Other providers control only 14% of the market, showing how handling ETFs is a sophisticated service that only a few providers can master, let alone draw sustainable scale and profit from.

Australian based strategies account for 47% of ETF business.

But the popularity of using locally listed ETFs to access and mirror international indices is becoming significant with these strategies now accounting for 16% of ETF business.

Fixed income ETFs make up a small but noteworthy 7% of the market.

The largest ETFs by traded volume during September were the StateStreet SPDR S&P/ASX 200, followed by the GOLD-ETFS Physical Gold ETF, the IVV iShares S&P 500, the BetaShares US Dollar ETF and the BetaShares Australian High Interest Cash ETF.

While there are 22 broad and sector Australian ETFs available, there are now 21 international ETFs.

There are also 10 fixed interest and cash ETFs available, including ETFs that reflect Australian bonds, government bonds, corporate bonds, and the US equivalents.

Currency and commodity ETFs make up a further 23, reports the ASX.

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