The NZX-listed Smartshares funds saw traded value more than triple year-on-year in the first half of 2020.
According to bespoke figures supplied by the NZX, over $1.2 billion of Smartshares exchange-traded funds (ETF) units changed hands in the six months to June 30 compared to just $360 million in the same period last year – an increase of 343 per cent.
By contrast, the value of ETF trades on the ASX jumped almost 90 per cent over the two respective half-year periods, Australian firm BetaShares reported last week. However, the ASX ETF market cap clocked in at close to A$66 billion as at June 30 against just under $3.5 billion for the Smartshares suite.
The much larger Australian ETF market features 243 products, of which 25 either matured or closed during the six months to June 30, BetaShares reports.
“Product development activity remained robust in the first half of 2020, with 10 new products launched,” the Australian ETF specialist says. “With the industry becoming increasingly competitive, and given the concentration we are seeing in terms of flows, we would not be surprised to see more consolidation in the industry over time.”
As flagged here in June, Smartshares launched four new low-cost ‘core’ ETFs last week, bringing its listed product range to 35. Smartshares is the only ETF provider on the NZX although BetaShares is rumoured to be scoping out the market here.
Hugh Stevens, Smartshares chief, said the ETFs had seen “significant net cash flows” over the six months to June 30 in a period of extreme volatility.
Stevens said Smartshares flows from external investors, rather than via in-house SuperLife channels, were particularly strong in the first half of 2020.
NZX shareholder metrics published early in July show external money was up over 30 per cent year-on-year during the six months to June 30. In total, external Smartshares funds under management (FUM) hit $1.4 billion by the end of June compared to $2.1 billion for SuperLife-sourced money (up 12 per cent over the same period in 2019).
SuperLife reported over $2.5 billion in FUM as at June 30 (up 6.6 per cent), split between $1 billion in its KiwiSaver scheme and the remainder in the group’s traditional superannuation vehicle. Currently, SuperLife invests about $400 million outside the Smartshares products.
As well as adding the four new ETFs to its various product offerings last week, SuperLife also introduced a new active ‘guest manager’ across the range.
The Castle Point 5 Oceans multi-manager fund joins two other actively-managed funds on the SuperLife menu with T Rowe Price and Schroders products added to the mix last year.
Pitched as an absolute return fund, 5 Oceans currently invests in both Castle Point strategies and products run by five external managers – Daintree, T Rowe Price, Schroders, Kohinoor and AMP Capital.
Stevens said the passive-leaning SuperLife could introduce other active managers to its product list over time.
Auckland-based consultancy firm MyFiduciary provides SuperLife with “investment advisory and related services for the ethical fund and diversified funds”, according to disclosure documents.
But for now the NZX is seeing a significant bump from the burgeoning ETF trade as retail investors pile into COVID-disrupted markets. The retail spike also shows up in NZX statistics that highlight a 230 per cent increase in total trades year-on-year during the first half of 2020: over the same period, the average NZ equities trade size dropped 41 per cent to about $2,500.
Most global markets have recouped almost all of the roughly 30 per cent losses sustained in a coronavirus-induced slump in late March.
Elsewhere, the NZX-owned invest platform, Wealth Technologies, saw a surge in funds under administration (FUA) in June to more than $3 billion versus about $2.3 billion at the end of May – likely boosted by rising markets and flows from major client, Craigs Investment Partners.
Hobson Wealth Partners is slated to transfer up to $4 billion from the now MMC-owned Aegis to Wealth Technologies in the coming months.
Wealth Technologies FUA was up 46 per cent at June 30 compared to the same date last year.