australian exchange fund report - microsoft · 2018-02-14 · investsmart australian etf report...

Australian Exchange

Traded Fund

ReportD E C E M B E R Q U A R T E R 2 0 17

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IMPORTANT: This information is general advice only and has been prepared without considering your financial situation or objectives and you should consider if the information is appropriate for your circumstances before making an investment decision. Before acting on this information, please ensure that you read all relevant disclosure documents, including but not limited to, the Product Disclosure Statement (PDS) and Financial Services Guide (FSG). You may wish to speak to a financial advisor for further guidance. Numerical figures presented are accurate at the time of preparation and where required, further disclosure will be appropriately provided. Past performance cannot be relied upon for future performance. Information presented, figures quoted and diagrams are accurate as at 31 December 2017. Exchange listed managed funds are included in this report but not rated. Before making any investment decisions, please read the latest PDS provided by each ETF issuer and check all relevant ETF fees, as they are subject to change without notice.


ContentsIntroduction

About this report 4About InvestSMART 6InvestSMART Star Rating 8

Highlights So which ETF is the best? 10The Active vs Passive debate 15

Market Overview Funds under management (FUM) 18Flows 21Costs 23Performance 25Yield 27

Security Overview Commodities 29Currency 31Property & Infrastructure 33Fixed Income & Cash 36Diversified 39Equities 41

InvestSMART Australian ETF Report • December Quarter 2017 4

Welcome to InvestSMART’s December Quarter 2017

Australian Exchange-Traded Funds (ETF) update.

ETFs are the basis of a range of InvestSMART’s

Separately Managed Account (SMA) portfolios. The

purpose of this report is to provide our clients with

an easy to digest wrap of market activity as well as a

greater level of insight into how and why we’ve built

InvestSMART’s SMA portfolios the way we have.

ETFs are a low-cost, hassle-free way for investors

to achieve their investment objectives. Whether

your aim is to diversify your portfolio or to obtain

exposure to a particular asset class or investment

theme, the ability to buy ETFs directly on market, their

low cost and transparency has seen the popularity of

these securities amongst investors grow rapidly.

We have categorised the ETF market by asset class to

allow members to quickly identify suitable securities

to fill any investment gaps in their portfolio and

remain aligned to their specific investment objectives.

About this report


FIGURE 1: ASSET CLASSES

Asset Class Description

Commodities ETFs that provide exposure to various Commodities & Natural Resources

Currency ETFs that provide exposure to various Currencies

Diversified ETFs that provide Diversified Multi Sector exposure

Equities ETFs that provide exposure to Equity Markets

Fixed Income & Cash ETFs that provide exposure to Interest Rate Securities and Cash

Property & Infrastructure ETFs that provide exposure to Domestic and Global Property and Infrastructure


Founded in 1999, InvestSMART Group Limited

(ASX:INV) believes everyone should have the

confidence to control their financial future and it

shouldn’t be hard or expensive to do so.

Whether you’re managing your own investments

or looking for a little help, we deliver

straightforward, flexible and affordable solutions

to ensure you are better able to meet your

investment goals.

Our three leading brands – InvestSMART, Eureka

Report and Intelligent Investor – together offer

actionable investment tools, wealth advice and

independent ASX-listed stock research.

We’re all about making investing simple. Statistics

show four in five Australians do not receive any

professional investment advice, with cost the

primary reason. We aim to change that.

Through our Portfolio Manager, stock research,

wealth commentary and affordable investment

products, we believe we are delivering the right tools

to help all Australians grow and protect their wealth.

About InvestSMART

Suitable for all investors as a total portfolio solution or the core of an investment plan.


Save time and invest in a diversified portfolio of ETFs with InvestSMART

Suitable for all investors as a total portfolio solution or the core of an investment plan.

Diversified IncomePortfolio

A portfolio of ETFs giving investors a mix of multiple asset classes to achieve a sustainable income and capital protection.

Core GrowthPortfolio

A portfolio of ETFs giving investors a mix of multiple asset classes to achieve long term, stable capital growth.

https://www.investsmart.com.au/invest-with-us/investsmart-diversified-income-model/1

https://www.investsmart.com.au/invest-with-us/investsmart-core-growth-model/4


When reviewing an ETF there are some key metrics

common to every security. Our quantitative 5 Star

Rating System takes each of these items into account,

reflecting the process we use to identify investments in

InvestSMART’s ETF-based Portfolios.

We have categorised the ETF market by asset class to

allow members to quickly identify suitable securities to

fill any investment gaps in their portfolio and remain

aligned to their specific investment objectives.

For our portfolios, we generally like to see a 4 to 5-star

rating. This implies the security rates highly across each

of the above-mentioned metrics. However, the star

rating is best used as a filtering tool when comparing

ETFs with the same objective.

It does not make sense to compare a highly liquid, and

hence low-cost S&P 500 ETF, to one designed to track

the performance of emerging markets, which are often

less liquid and more expensive to access.

InvestSMART Star Rating


As Figure 3 shows, only eight Australian ETFs out of the total of 173 listed

funds achieve the maximum 5 Star Rating. The bulk of ETFs are rated 3

Stars or less.

It should also be noted that the InvestSMART Star Rating is a quantitative

measure and does not take personal investment objectives into account.

It does not constitute a recommendation.

FIGURE 2: INVESTSMART STAR RATING CRITERIA

Factor Description

Size Funds under management.

Fees Fund management fees as a percentage of FUM.

Liquidity Trading volumes.

Spread The average percentage difference between the bid & ask.

Tracking Error The difference in the return profile of the Fund to its benchmark.

FIGURE 3: NUMBER OF ETFS PER STAR RATING

Star Rating Number of ETFs

8

36

61

52

2

Not Rated 14

Total 173


Following our September Quarter ETF report, we had a

lot of members asking, “but which ETF is best?”

Determining this is not as simple as looking at a

funds performance. As ETFs are passively managed

and are constructed to track a given benchmark the

performance of an ETF over any given period does not

generally indicate it is better or worse than others.

Rather, it is simply reflective of the performance of the

asset class or sector the ETF has been designed to track.

With this in mind, in order to determine which ETF is

best for you, an investor must firstly understand how

their portfolio is currently positioned. With over 60,000

self-directed investors utilising InvestSMART’s Portfolio

Manager, we gather unique insights into the behaviour

of a large proportion of Australia’s investing public.

We reviewed the average asset allocation of portfolios

and found that most Australians wealth is invested in

domestic equities.

So which ETF is best?


We recognise that over the long term no one asset class is guaranteed

to deliver substantial outperformance on a consistent basis and that

attempting to time turning points across various asset classes is near

impossible.

As such, our view on portfolio construction is based on the concept of

diversification. Via InvestSMART’s HealthCheckTM we assist our clients in

understanding how their portfolio is currently positioned and whether it

is appropriate in achieving their objectives.

If we take the above to be an indication of the ‘average’ Australian

portfolio and decided a ‘balanced portfolio’ would be best suited in

achieving our investment objective, we’d see that we are overweight

domestic equities and would determine the following:

What is ‘best’ for this particular portfolio therefore would be to diversify

by re-investing a portion of Equity exposure across Fixed Interest and

International Equities. We could then filter through the ETF market to find

securities worthy of more detailed analysis. This can be achieved using

InvestSMART’s ETF Filtering Tool.

FIGURE 4: AVERAGE ASSET ALLOCATION FOR PORTFOLIOS SUB $250K

Source: Information has been collated from de-identified data through InvestSMART’s Portfolio Manager and HealthCheckTM

Comparison has been made to a model asset allocation as determined by InvestSMART Group.

Source: Information has been collated from de-identified data through InvestSMART’s Portfolio Manager and HealthCheckTM

Comparison has been made to a model asset allocation as determined by InvestSMART Group.

FIGURE 5: BALANCED ASSET ALLOCATION

Asset Class Current Portfolio Balanced Portfolio Required action

Australian Equities 72% 22% Reduce by 50%

International Equities 8% 22% Increase by 14%

Property 6% 11% Increase by 5%

Cash 11% 12% Increase by 1%

Fixed Interest 3% 33% Increase by 30%

12

For the Fixed interest component, should we decide we would like Australian Bond Exposure only. To identify these securities

we could search for, Asset Class: Fixed income and Cash > Geographic Exposure: Australia > Category: Bonds – Australia.

FIGURE 6: AUSTRALIAN FIXED INCOME AND CASH ETFS

Source, InvestSMART ETF Filtering Tool


For the International Equities component, should we decide we would like to focus on large cap, global, broad-based securities. To identify these securities

we could search for, Asset Class: Equities > Geographic Exposure: Global > Category: Equity World Large Blend.

After narrowing down the list, we can then conduct further due diligence to determine which security best suits our needs.

We will explore the due diligence process next quarter.

FIGURE 7: GLOBAL EQUITY ETFS

Source, InvestSMART ETF Filtering Tool

Step 2

InvestSMART HealthCheckTM

Determine your investment objectives and identify where the

holes exist in your Asset Allocation

Step 3

Use ETF Filter Use InvestSMART’s ETF Filtering tool to identify ETFs that will provide the

exposure you need

Step 4

Due DiligenceReview each ETF in greater detail

to determine whether it suits your objectives

Step 1

Load Your Holdings to Portfolio Manager

Load your current holdings/ portfolio into InvestSMART’s

Portfolio Manager

A simple way to monitor your investments in one easy place – for free

Track any security and over 8,000 funds

InvestSMART Portfolio Manager

https://www.investsmart.com.au/portfolio-manager


As the ETF market grows, there is growing debate

surrounding what is better, passive or active investment.

We don’t believe it is a simple black or white consideration.

Perhaps to actively engaged investors the concept of a

passive fund seems illogical. “Why would I want to invest

in something that guarantees benchmark returns?”.

However, for the average person who does not have the

time or skill to invest themselves or identify a manager

that will ensure they consistently outperform over an

extended period, passive strategies could be suitable.

Even Warren Buffett has stated that for most investors the

best option is to put their money in a low-cost index fund.

Passive investing has its place in building the core of a

well-diversified portfolio. Where fees are justified by way

of consistent long-term performance, active strategies

also have a place within a portfolio in generating

alpha (the excess return of an investment relative to the

return of a benchmark index).

The Active vs Passive

debate

InvestSMART Portfolio Manager

https://www.investsmart.com.au/portfolio-manager

16

FIGURE 8: PASSIVE VS ACTIVE STRATEGIES

Where an allocation to passive strategies is suitable

Where an allocation to active strategies is suitable

‘Generic’ markets where mispricing is uncommon

Markets where mispricing exists

As the core building blocks to a diversified portfolio

Where a manager shows history of consistent outperformance

For investors who lack the time or skill to time markets

Coming back to ETFs and contrary to common belief, no longer are all

listed funds simple passive market cap weighted, index hugging securities

and there is a growing number of actively managed funds coming to

market. That is, actively managed funds that you can buy or sell in the

same way as any security on the market. These securities are being

generally referred to as Exchange Quoted Managed Funds (EQMF) or

Exchange Traded Managed Funds (ETMF). Similar to mFunds but actively

quoted not just settled on ASX systems.

This growing category of listed fund allows investors to allocate capital

toward active managed strategies without the hassle of filling out

additional paperwork and with the benefit of knowing the price at which

you will be buying or selling units at the time of transaction.

FIGURE 9: BENEFITS OF A LISTED FUND

Benefits to Investors Benefits to Fund Managers

No minimum investment barriers Open ended

Ability to buy & sell as easily as any other listed security

Reduced paperwork

Pricing transparency Available on platforms/wrap accounts

Intra day pricing rather than end-of-day Distribute to direct investor

At present there are 14 actively managed funds listed on the exchange

with varying mandates, from those that focus on yield, to small caps, to

international equity markets. 2017 saw 5 new actively managed funds

come to market and we see this becoming an increasingly common way

for fund managers to structure their funds.

When identifying whether a fund is a suitable investment, some things to

consider include:

1. Cost: As seen in the above table, actively managed funds will generally

charge higher fees than passive funds. This is the premium you pay

for the managers skill in generating alpha.

2. Performance: Elaborating on point 1, does the manager have a track

record of consistent performance over longer time frames? Manager

skill is worth paying for.


3. Investment Objective: Perhaps the most important consideration is

in understanding what you are investing in and how it fits as part of

achieving your overall investment objective. It is not sensible to simply

chase returns without regard to risk.

Given these funds are not intended to simply track their benchmark,

we do not currently provide a star rating on them. The InvestSMART

Star Rating is a measure designed to compare similar securities across

a number of quantifiable metrics: size, costs, liquidity & tracking error.

Throughout the analysis, this is denoted by ‘Not Rated’.

FIGURE 10: EXCHANGE QUOTED MANAGED FUNDS

Code Name Region Asset Class Sub Category MER Spread Total Cost FUM ($m)

PAXX Platinum Asia Fund Asia Equities Equity Asia Pacific w/o Japan 1.10% N/A 1.10% $69.79

KSM K2 Australian Small Cap Fund Australia Equities Alternative Strategies 2.70% 1.21% 3.91% $16.55

SWTZ Switzer Dividend Growth Fund Australia Equities Equity Australia Large Growth 0.89% 0.51% 1.40% $77.67

HBRD BetaShares Active Australian Hybrids Fund Australia Fixed Income & Cash Bonds - Australia 0.55% N/A 0.55% $22.06

DMKT AMP Capital Dynamic Markets Fund Global Equities Multisector Balanced 0.50% 0.60% 1.10% $25.53

GROW Schroder Real Return Fund Global Equities Multisector Balanced 0.90% 0.43% 1.33% $45.25

PIXX Platinum International Fund Global Equities Equity World Large Blend 1.10% N/A 1.10% $124.97

MGE Magellan Global Equities Fund Global Equities Equity World Large Blend 1.35% 0.41% 1.76% $980.89

MHG Magellan Global Equities Fund Currency Hdg Global Equities Equity World - Currency Hedged 1.35% 0.47% 1.82% $63.10

MOGL Montgomery Global Equities Fund Global Equities Equity World Large Value 1.89% N/A 1.89% $62.58

KII K2 Global Equities Fund Global Equities Alternative Strategies 2.70% 1.29% 3.99% $20.33

GLINAMP Capital Global Infrastructure Securities Fund Unhdg

Global Property & Infrastructure Infrastructure - Global 0.85% 0.62% 1.47% $28.24

RENTAMP Capital Global Property Securities Fund Unhdg

Global Property & Infrastructure Equity Global Real Estate 0.99% 0.75% 1.74% $17.20

MICH Magellan Infrastructure Fund Ccy Hdg Global Property & Infrastructure Infrastructure - Global 1.05% 0.40% 1.45% $145.28

Note: N/A indicates insufficient data due to recent listing

Source: MorningStar, ASX

18

Market Overview Funds under management (FUM)The Australian ETF market exceeded expectations of $35bn in Funds Under Management (FUM) by calendar year end. While this has primarily been driven by

inflows, strong performance across the traditional ‘risk’ asset classes, Commodities, Equities & Property have added to FUM growth.

FIGURE 11: NEW ETF LISTINGS

Issuer No. Funds (Sep) No. Funds (Dec) FUM $m (Sep) FUM $m (Dec) Market Share

Blackrock 39 39 $9,147.23 $ 10,431.83 29.34%

Vanguard 17 22 $8,992.92 $10,077.28 28.34%

State Street 16 16 $5,232.01 $5,691.77 16.01%

Betashares 40 42 $4,227.48 $4,527.69 12.73%

Magellan 3 3 $1,037.71 $1,189.27 3.34%

VanEck 10 10 $706.56 $969.78 2.73%

Russell 6 6 $621.96 $647.82 1.82%

ETFS Securities 15 15 $768.75 $889.28 2.50%

Market Vectors 4 4 $380.18 $445.87 1.25%

UBS 9 9 $271.50 $272.19 0.77%

Platinum 2 2 $ – $194.76 0.55%

Switzer 1 1 $73.70 $77.67 0.22%

Montgomery 0 1 $ – $62.58 0.18%

Schroder 1 1 $41.90 $45.25 0.13%

K2 Asset Management 2 2 $38.36 $36.89 0.10%

165 173 $31,540.26 $35,559.93 100.00%Source: MorningStar, ASX


New funds continue to be listed with 8 new securities across a range of categories coming online during the December quarter.

FIGURE 12: NEW ETF LISTINGS

Security Fund Asset Class Focus

VBND Vanguard Global Aggregate Bd Hdg ETF Fixed Income & Cash Provide exposure to global income-generating securities.

HBRD BetaShares Active Australian Hybrids Fund (managed fund) Fixed Income & Cash Provide exposure to an actively managed, diversified portfolio of hybrid securities.

VDCO Vanguard Diversified Conservative ETF Diversified Diversified Fund of Funds. For investors with a low tolerance for risk.

VDBA Vanguard Diversified Balanced ETF DiversifiedDiversified Fund of Funds. For investors seeking a balance between income and capital growth.

VDGR Vanguard Diversified Growth ETF Diversified Diversified Fund of Funds. For investors seeking long-term capital growth.

VDHG Vanguard Diversified High Growth ETF DiversifiedDiversified Fund of Funds. For investors with a high tolerance for risk who are seeking long-term capital growth.

FAIR BetaShares Australian Sustnby Ldrs ETF Equities Ethical, sustainable focused Domestic Equity Fund.

MOGL Montgomery Global Equities Fund (Managed Fund) Equities Value focused Global Equity Fund.

Source: MorningStar, ASX

20

Asset Class

The largest asset class in terms of both

product range as well as FUM is equities,

representing over 75% of the market.

Geography

Geographically, the largest exposure

for ETFs across the market is Australia,

followed by those providing diversified

global exposure.

Issuer

With combined FUM of over $30 billion, close

to 90% of the Australian ETFs market is managed

by five issuers, namely BlackRock, Vanguard,

State Street, BetaShares and Magellan.

FIGURE 13: AUSTRALIAN ETF MARKET BREAKDOWN

Source: ASX, Morningstar


Market Overview FlowsFund flow is an interesting metric when analysing the ETF market as it

provides insight into ‘net demand’. Given the majority of ETFs are index

tracking, that is they are designed to replicate the performance of a given

market index or asset class, analysing flows gives an insight into trends in

market sentiment toward a given thematic.

Overview

Equities continue to see the majority of inflows, though the most notable

change when compared to previous periods has been in the Fixed Income

& Cash category. December was the first time this calendar year that

there were net outflows in this category.



FIGURE 15: FUM FLOWS ($M) BY ASSET CLASSFIGURE 14: FUM FLOWS & TURNOVER

22

FIGURE 16: LARGEST INFLOWS (QTR)

ETF Flows ($m) Sub Category

[IOZ] iShares Core S&P/ASX 200 ETF $510.71 Equity Australia Large Blend

[VGS] Vanguard MSCI Index Intl ETF $106.67 Equity World Large Blend

[VHY] Vanguard Australian Shares High Yld ETF

$82.48 Equity Australia Large Blend

[PIXX] Platinum International (Quoted Mngd Hdg)

$82.46 Equity World Large Blend

[QPON] Betashares Aus Bank Sr Fltng Rt Bd ETF

$80.05 Diversified Credit

FIGURE 17: LARGEST OUTFLOWS (QTR)

ETF Qtr Flows ($m) Sub Category

[HVST] BetaShares Australian Div Harvester(mgd)

–$71.36 Equity Australia Large Value

[USD] BetaShares US Dollar ETF –$33.87 Miscellaneous

[POU] BetaShares British Pound ETF –$27.30 Miscellaneous

[ETF] UBS IQ Morningstar Australia Quality ETF

–$17.52 Equity Australia Large Blend

[ITW] iShares MSCI Taiwan ETF –$16.59 Equity World Other

Source: ASX, MorningstarSource: ASX, Morningstar

While ETFs designed to provide exposure to floating rate securities (FLOT,

QPON & HBRD) saw net inflows, BetaShares Australia High Interest Cash

ETF (AAA) saw net outflows of $75m during the month of December.

November saw exceptionally large equity market focused inflows with

iShares Core S&P ASX 200 ETF (IOZ) making up over a third of this figure.

ETFs designed to provide broad based equity exposure saw the largest

inflows for the quarter, while BetaShares Dividend Harvesting (HVST), US

Dollar (USD) and British Pound (POU) ETFs saw the largest net outflows.


Market Overview CostsThere are two main components to the total cost of an ETF.

The Management Expense Ratio (MER) and the difference between

the Bid and the Offer (spread).

Generally speaking, simpler index tracking (passive) funds will have a

lower MER than an Actively Managed Fund. This is primarily due to the

difference in the objectives of the Fund Manager. While passive funds

are designed to deliver returns in line with a benchmark, active funds are

managed to outperform them and to do so consistently over long periods

of time requires a greater levels of oversight, experience and skill.

The spread is generally a function of the liquidity in the underlying

securities and transactional costs to acquire them.

Overview

Income & cash remains the cheapest asset class, even after incorporating

spreads.

At a security level, broad-based equity market and cash-focussed ETFs are

the cheapest, which is reflective of underlying liquidity in these markets. Source: ASX, Morningstar

FIGURE 18: COST ANALYSIS SOURCE

24


FIGURE 19: FIVE CHEAPEST ETFS

ETF MERQtr Avg Spread

Total Cost

Management Type

[BILL] iShares Core Cash ETF 0.07% 0.01% 0.08% Index Tracking

[IVV] iShares S&P 500 ETF 0.04% 0.05% 0.09% Index Tracking

[VTS] Vanguard US Total Market Shares ETF

0.04% 0.08% 0.12% Index Tracking

[ISEC] iShares Enhanced Cash ETF 0.12% 0.01% 0.13% Smart Beta

[VAS] Vanguard Australian Shares ETF



FIGURE 20: FIVE MOST EXPENSIVE ETFS

ETF MERQtr Avg Spread

Total Cost

Management Type

[KII] K2 Global Equities Fund (Hedge Fund)

2.70% 1.37% 4.07% Actively Managed

[KSM] K2 Australian Small Cap Fund


[QAG] BetaShares Agriculture ETF CcyHgd(Synth)


[MOGL] Montgomery Global Equities Fund (Managed Fund)


[QCB] BetaShares Com Basket ETF Ccy Hgd(Synth)


Geographically, ETFs focused on Australia and the US are, on average, the

cheapest.

Per below, index tracking broad based equity and cash exposed ETFs are

the cheapest with low MERs and tight spreads, whereas the active and

more exotic strategies funds tend to be more expensive.

It should be emphasised though that high fees should not be cause

for immediate dismissal when reviewing an ETF. If a particular security

is suited to achieving your investment objective, or if in the case of an

actively managed fund, long term performance warrants paying a higher

fee, then they should be considered.


Market Overview PerformanceA passively managed ETF should closely track its underlying index. Unlike

active fund mandates, negative returns do not necessarily mean the fund

manager is doing a bad job, but rather reflects the performance of the

underlying securities the ETF has been designed to track.

When reviewing an actively managed fund though, cost vs long term

performance is an important metric to consider.

Overview

Equities and resources were the standout performers during the period

with many securities showing double digit returns for the quarter.

As a result and as would be expected, the ‘bear’ funds (BBOZ, BBUS &

BEAR), that is those designed to deliver positive returns when equity

markets fall, have performed poorly.

Geographically, ETFs exposed to Asia and emerging markets have

delivered strong returns over the past year.

FIGURE 21: 3, 6 AND 12 MONTH PERFORMANCE


26

FIGURE 22: TOP FIVE PERFORMING SECURITIES

ETF Historical Yield Sub Category

[HVST] BetaShares Australian Div Harvester(mgd) 11.23%Equity Australia Large Value

[IHOO] iShares Global 100 AUD Hedged ETF 11.15%Equity World - Currency Hedged

[VCF] Vanguard Intl Credit Secs Idx (Hdg) ETF 10.29% Diversified Credit

[VIF] Vanguard Intl Fxd Intr Idx (Hdg) ETF 10.17% Bonds - Global

[ZYAU] ETFS S&P/ASX 300 High Yield Plus ETF 9.95%Equity Australia Large Blend

FIGURE 23: WORST FIVE PERFORMING SECURITIES

ETF3 Mth

ReturnSub Category

[BBOZ] BetaShares Australian Eqs Strong BearHdg –15.51% Alternative Strategies

[BBUS] BetaShares US Eqs Strong Bear H-Ccy Hdg –14.16% Alternative Strategies

[BEAR] BetaShares Aus Equities Bear Hedge –6.74% Alternative Strategies

[QAG] BetaShares Agriculture ETF CcyHgd(Synth) –3.72% Miscellaneous

[AUDS] BetaShares Strong Australian Dollar Hdg –2.06% Alternative Strategies

Source: MorningstarSource: Morningstar


Market Overview YieldYield is the income earned on an investment and is expressed as a

percentage. Historically, Fixed income, Property & Infrastructure securities

generate most of an investor’s return from distributions of income.

Equities are mixed given a company has the option to distribute profits or

retain them to grow, while investments in Commodities and Currency return

little to no returns from yield given they are non-income producing assets.

Overview

As expected, Equities Fixed Income & Cash and Property & Infrastructure

continue to provide the greatest income based returns on average.

Geographically, Australia sees the highest returns from income, reflective

of our relatively high interest rates and equity pay-out ratios when

compared to the rest of the world.

The highest yielding security for the year to December was BetaShares

Australian Dividend Harvester (HVST). This fund is specifically aimed

to generate regular franked dividend income by investing in large cap

Australian shares.

FIGURE 24: AVERAGE HISTORIC YIELD


28

FIGURE 25: TOP 5 YIELDING ETFS

ETF Historical Yield Sub Category

[HVST] BetaShares Australian Div Harvester (mgd) 11.23% Equity Australia Large Value

[IHOO] iShares Global 100 AUD Hedged ETF 11.15% Equity World - Currency Hedged

[VCF] Vanguard Intl Credit Secs Idx (Hdg) ETF 10.29% Diversified Credit

[VIF] Vanguard Intl Fxd Intr Idx (Hdg) ETF 10.17% Bonds - Global

[ZYAU] ETFS S&P/ASX 300 High Yield Plus ETF 9.95% Equity Australia Large Blend

Source: Morningstar


Securities Overview CommoditiesThese securities are designed to provide exposure to the performance of

various commodities and natural resources. The majority are physically

backed, though there is a number of synthetic securities available.

We do not hold any Commodity focused ETFs in InvestSMART’s Separately

Managed Account (SMA) portfolios.

Overview

While BetaShares Currency Hedged Gold Bullion ETF (QAU) saw net

outflows for the quarter of $11.6m, ETF Securities Gold ETF (GOLD) saw

$11m in net inflows. While it may be coincidental, it may also be reflective

of a switch into the lower cost GOLD (0.40% MER) and of a view on the

currency as GOLD is unhedged whereas QAU is hedged.

BetaShares Currency Hedged Agriculture ETF (QAG) was the only security

of this category to deliver a negative return for the period, while rising oil

prices saw BetaShares Oil ETF (OOO) deliver positive returns in excess

of 15%. ^ ETF Issuers indicates a combination of ETF providers as detailed in the Issuer column of Figure 11 on page 18, as throughout the entire ETF report.

Source: ETF Issuers^

2.0

FUM

Avg. YieldAvg. Star Rating

Qtr Flows

Avg. MER

3mth Avg. Return

Qtr Avg. Spread

12mth Avg. Return

No. Funds

$729m

0.00%

-$20.8m

0.54%

3.70%

0.72%

5.20%

10

Commodity ETF Highlights

FIGURE 26: COMMODITY ETFS BY GEOGRAPHY

30

FIGURE 27: COMMODITY ETFS

Security FUM ($m) Qtr Flows

($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity

Sub Category Star Rating

GLOBAL

Agriculture

[QAG] BetaShares Agriculture ETF CcyHgd(Synth)

$2.25 –$0.33 0.69% 1.61% –3.72% –11.90% 0.00% 12.71% Miscellaneous

Diversified Commodities

[ETPMPM] ETFS Physical PM Basket ETC $5.00 – 0.44% 0.70% 3.03% 6.56% 0.00% 2.82% Commodities & Precious Metals

[QCB] BetaShares Com Basket ETF Ccy Hgd(Synth)

$8.12 –$1.77 0.69% 1.43% 5.51% 4.15% 0.00% 17.67% Commodities & Precious Metals

Gold

[GOLD] ETFS Physical Gold ETC $559.99 $11.03 0.40% 0.14% 0.84% 2.70% 0.00% 4.42% Commodities & Precious Metals

[QAU] BetaShares Gold Bullion ETF Ccy Hedged


[ZGOL] ETFS Physical Singapore Gold ETF $13.26 – 0.40% 0.24% 0.96% 3.14% 0.00% 4.12% Commodities & Precious Metals

Oil

[OOO] BetaShares Crude Oil ETF Ccy Hgd(Synth)


Palladium

[ETPMPD] ETFS Physical Palladium ETC $1.15 –$1.01 0.49% 0.89% 13.27% 44.05% 0.00% 7.66% Commodities & Precious Metals

Platinum

[ETPMPT] ETFS Physical Platinum ETC $1.16 –$1.80 0.49% 0.83% 0.74% –6.05% 0.00% 6.35% Commodities & Precious Metals

Silver

[ETPMAG] ETFS Physical Silver ETC $56.61 – 0.49% 0.80% 0.23% –4.33% 0.00% 3.61% Commodities & Precious Metals



Securities Overview Currency These securities are designed to track the performance of the Australian

dollar relative to various currencies.

We do not hold any Currency focussed ETFs in InvestSMART’s Separately


Overview

USD and POU provide investors with a way to gain exposure to a falling

Australian dollar relative to the US Dollar and British Pound respectively

and the December quarter saw large outflows in each of these funds.

The consensus view is that the AUD will be lower by year end with low

expectations of a rate rise in 2018 compared to more hawkish foreign

central banks.

Source: ETF Issuers

2.9

FUM


Qtr Flows

Avg. MER

3mth Avg. Return

Qtr Avg. Spread

12mth Avg. Return

No. Funds

$536m

0.30%

-$59.2m

0.67%

0.66%

0.15%

-1.42%

7

Currency ETF Highlights

FIGURE 28: CURRENCY ETFS BY GEOGRAPHY

32

FIGURE 29: CURRENCY ETFS


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


ASIA

[ZCNH] ETFS Physical Renminbi ETF $0.46 $– 0.30% 0.24% 2.41% –1.17% 0.00% 1.28% Miscellaneous

EUROPE

[EEU] BetaShares Euro ETF $6.92 $1.14 0.45% 0.12% 1.79% 4.90% 0.00% 15.51% Miscellaneous

[POU] BetaShares British Pound ETF $28.95 –$27.30 0.45% 0.09% 1.10% 1.03% 0.00% 32.28% Miscellaneous

AUSTRALIA

[AUDS] BetaShares Strong Australian Dollar Hdg $1.61 $– 1.38% 0.19% –2.06% 19.26% 1.95% 79.49% Alternative Strategies

USA

[USD] BetaShares US Dollar ETF $472.87 –$33.87 0.45% 0.10% 0.36% –7.41% 0.17% 9.93% Miscellaneous

[YANK] BetaShares Strong US Dollar Hedge $11.82 –$1.35 1.38% 0.15% 0.56% –19.46% 0.00% 17.89% Alternative Strategies

[ZUSD] ETFS Physical US Dollar ETF $14.22 $2.16 0.30% 0.15% 0.46% –7.11% 0.00% 14.51% Miscellaneous



Securities Overview Property & InfrastructureThese securities are designed to track various Domestic and Global

Property & Infrastructure indexes.

We hold positions in VAP, IFRA & DJRE in InvestSMART’s Separately


Overview

Domestic focused REITs were the best performing category this quarter

with MVA, SLF & VAP all delivering returns in excess of 7% for the 3

months to December. Below we list these three securities head to head.

It is interesting to note that despite a relatively small pool of potential

securities to invest in, there are three ETFs designed to track Domestic

REITs. Per below, you can see that each is constructed slightly differently

and this will result is slightly different outcomes. It is important to dive

deeper into an ETFs construction when selecting one that is right for you.

2.9

FUM


Qtr Flows

Avg. MER

3mth Avg. Return

Qtr Avg. Spread

12mth Avg. Return

No. Funds

$2,226m

2.80%

+$140.7m

0.59%

4.42%

0.33%

6.69%

9

Property & Infrastructure ETF Highlights

FIGURE 30: PROPERTY & INFRASTRUCTURE ETFS BY GEOGRAPHY

Get exposure to property and infrastructure with the InvestSMART Property & Infrastructure Portfolio

Source: ETF Issuers

https://www.investsmart.com.au/invest-with-us/investsmart-property-and-infrastructure-model/9



34

FIGURE 31: COMPARISON OF AUSTRALIAN REIT ETFS

VanEck Vectors Australian Property ETF SPDR S&P/ASX 200 Listed Property ETF Vanguard Australian Property Securities ETF

Code MVA SLF VAP

Manager VanEck State Street Vanguard

Benchmark MVIS Australian A-REIT Index S&P/ASX 200 A-REITs S&P/ASX 300 A-REITs

Benchmark Methodology Market Capitalisation Market Capitalisation Market Capitalisation

Benchmark Constituents 11 20 31

Star Rating 3 Stars 4 Stars 4 Stars

MER 0.35% 0.40% 0.23%

Avg Spread 0.15% 0.18% 0.09%

12 Month Return 7.27% 5.56% 6.61%

Tracking Error 0.15% 0.09% 0.09%

Distribution Frequency Semi-Annual Quarterly Quarterly

VAP is our preferred security in this space given greater diversification with 31 underlying securities, low tracking error, MER and spread.




FIGURE 32: PROPERTY & INFRASTRUCTURE ETFS


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


AUSTRALIA

Property

[MVA] VanEck Vectors Australian Property ETF $77.92 $2.90 0.35% 0.16% 7.07% 7.27% 5.47% 5.31%Equity Australia Real Estate

[SLF] SPDR? S&P/ASX 200 Listed Property ETF $598.21 –$3.91 0.40% 0.18% 7.77% 5.56% 4.09% 3.60%Equity Australia Real Estate

[VAP] Vanguard Australian Property Secs ETF $1,098.93 $66.54 0.23% 0.08% 7.72% 6.61% 2.58% 5.15%Equity Australia Real Estate

GLOBAL

Infrastructure

[GLIN] AMP Capital Global Infras Secs Unhdg $28.24 $3.55 0.85% 0.70% 0.81% 8.22% 2.07% 5.36% Infrastructure – Global Not rated

[IFRA] VanEck Vectors FTSE Glbl Infras(Hdg)ETF $64.06 $14.32 0.52% 0.20% 2.09% 14.61% 3.17% 13.63% Infrastructure – Global

[MICH] Magellan Infrastructure Ccy Hdg ETF $145.28 $30.66 1.05% 0.44% 3.02% 16.35% 2.69% 8.03% Infrastructure – Global Not rated

[CORE] ETFS Global Core Infrastructure ETF $2.34 $1.60 0.45% N/A 2.28% 0.00% 0.22% 41.39% Equity World Other

Property

[DJRE] SPDR? Dow Jones Global Real Estate ETF $194.06 $25.84 0.50% 0.13% 3.81% –0.77% 3.45% 10.58% Equity Global Real Estate

[RENT] AMP Capital Global Property Secs Unhdg $17.20 –$0.75 0.99% 0.82% 5.19% 2.40% 1.46% 5.18% Equity Global Real Estate Not rated

36

These securities are designed to provide investors access to domestic and

global Fixed Income & Cash securities.

We hold positions in AAA, FLOT & IAF in InvestSMART’s Separately


Overview

Domestic Government Bonds were the best performing of the fixed

interest securities over both the quarter and the last 12 months. The

majority of inflows though were directed to funds exposed to floating

rate securities (HBRD, QPON, FLOT) and domestic corporate fixed rate

securities (PLUS & VACF).

Vanguard listed a new Hedged Global Bond Fund (VBND) in October which

seeks to provide exposure to high-quality, income-generating securities

issued by governments, government-owned entities, government-

guaranteed entities, investment-grade corporate issues and securitised

assets from around the world.

FIGURE 33: FIXED INCOME & CASH ETFS BY GEOGRAPHY

Securities Overview Fixed Income & Cash

3.3

FUM


Qtr Flows

Avg. MER

3mth Avg. Return

Qtr Avg. Spread

12mth Avg. Return

No. Funds

$4,089m

2.90%

+$278.4m

0.26%

1.07%

0.16%

2.94%

25

Fixed Income & Cash ETF Highlights

Source: ETF Issuers

Reduce volatility with the InvestSMART Hybrid Income Portfolio

https://www.investsmart.com.au/invest-with-us/investsmart-hybrid-income-model/13



FIGURE 34: FIXED INCOME & CASH ETFS – PART 1


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


GLOBAL

Corporate

[IHCB] iShares Core Global Corp Bd AUDH ETF $85.57 $6.40 0.26% 0.20% 1.28% 5.68% 2.91% 14.23% Bonds – Global

[IHHY] iShares Global High Yield Bond AUDH ETF

$23.62 –$2.13 0.56% 0.25% 0.27% 6.78% 6.46% 33.02% High Yield Credit

Diversified

[IHEB] iShares JP Morgan USD EmMkts Bd AUDH ETF

$12.04 $1.07 0.51% 0.19% 1.14% 10.16% 3.29% 51.82%Bonds–Emerging Market Debt

[VCF] Vanguard Intl Credit Secs Idx (Hdg) ETF $112.68 –$10.81 0.30% 0.22% 1.13% 5.23% 10.29% 16.83% Diversified Credit

[VBND] Vanguard Global Aggregate Bd Hdg ETF $4.55 $4.53 0.20% N/A 0.00% 0.00% 0.37% 47.16% Bonds – Global

Government

[VIF] Vanguard Intl Fxd Intr Idx (Hdg) ETF $159.90 $10.03 0.20% 0.19% 0.83% 2.57% 10.17% 10.66% Bonds – Global

AUSTRALIA

Cash

[AAA] BetaShares Aus High Interest Cash ETF

$1,257.38 –$6.16 0.18% 0.02% 0.50% 2.03% 2.01% 17.51% Australian Cash

[BILL] iShares Core Cash ETF $163.85 $8.02 0.07% 0.01% 0.42% 0.00% 0.89% 5.56% Australian Cash

[ISEC] iShares Enhanced Cash ETF $16.06 $1.00 0.12% 0.01% 0.51% 0.00% 1.06% 8.29%Australian Short Term Fixed Interest

[MONY] UBS IQ Cash ETF $1.00 $0.00 0.18% 0.06% 0.26% 0.00% 0.97% 2.83% Australian Cash

Corporate

[PLUS] VanEck Vectors Australian Corp Bd+ ETF $151.04 $70.60 0.32% 0.23% 1.64% 0.00% 1.85% 18.99% Diversified Credit

[RCB] Russell Inv Australian Select CorpBd ETF $154.08 $6.09 0.28% 0.23% 1.04% 4.98% 4.22% 6.11% Bonds – Australia

38


FIGURE 34: FIXED INCOME & CASH ETFS – PART 2


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


AUSTRALIA

Corporate

[VACF] Vanguard Australian Corp Fxd Intr ETF $84.07 $21.20 0.26% 0.18% 1.43% 5.03% 2.94% 12.09% Bonds – Australia

[FLOT] VanEck Vectors Australian Fltng Rt ETF $52.15 $31.13 0.22% 0.06% 0.66% 0.00% 1.44% 28.31% Diversified Credit

[QPON] Betashares Aus Bank Sr Fltng Rt Bd ETF $190.85 $80.05 0.22% 0.04% 0.82% 0.00% 1.34% 24.52% Diversified Credit

Diversified

[IAF] iShares Core Composite Bond ETF $494.27 $38.52 0.20% 0.12% 1.39% 3.47% 2.29% 5.83% Bonds – Australia

[VAF] Vanguard Australian Fixed Interest ETF $679.81 $0.23 0.20% 0.07% 1.39% 3.50% 2.88% 6.25% Bonds – Australia

Government

[BOND] SPDR? S&P/ASX Australian Bond ETF $28.59 $0.02 0.24% 0.15% 1.99% 4.05% 2.67% 5.64% Bonds – Australia

[GOVT] SPDR? S&P/ASX Australian Govt Bd ETF $12.87 –$2.55 0.22% 0.12% 1.90% 3.68% 2.35% 11.32% Bonds – Australia

[IGB] iShares Treasury ETF $21.32 –$8.21 0.26% 0.19% 1.52% 3.21% 2.65% 11.02% Bonds – Australia

[ILB] iShares Government Inflation ETF $99.24 $2.34 0.26% 0.35% 2.54% 3.47% 0.94% 5.09% Bonds – Inflation – Linked

[RGB] Russell Inv Australian Government Bd ETF $59.88 $0.01 0.24% 0.29% 1.74% 3.65% 3.14% 2.09% Bonds – Australia

[RSM] Russell Inv Australian Semi-Govt Bd ETF $60.88 $0.03 0.26% 0.27% 0.95% 2.85% 2.36% 2.09% Bonds – Australia

[VGB] Vanguard Australian Government Bond ETF

$141.88 $4.99 0.20% 0.11% 1.45% 3.20% 2.56% 9.91% Bonds – Australia

Hybrids

[HBRD] BetaShares Active Australian Hybrids Fund (managed fund)

$22.06 $22.04 0.55% N/A 0.00% 0.00% 0.47% 183.56% Bonds - Australia Not rated


These securities are designed to provide investors with diversified multi

sector asset allocation.

We do not hold any Diversified ETFs in InvestSMART’s Separately Managed

Account (SMA) portfolios.

Overview

Vanguard listed the Australia markets’ first multisector or ‘diversified’

ETFs in November. These listed fund of funds follow the same principles

that our diversified SMA portfolios do. Given they have only just listed we

will look to review them in greater detail next quarter as data is limited at

the time of writing.

FIGURE 35: DIVERSIFIED ETFS BY GEOGRAPHY

Securities Overview Diversified

2.0

FUM


Qtr Flows

Avg. MER

3mth Avg. Return

Qtr Avg. Spread

12mth Avg. Return

No. Funds

$23m

0.42%

+$30.9m

0.27%

0.00%

0.28%

0.00%

4

Diversified ETF Highlights

Source: ETF Issuers

40

Save time and invest in a diversified portfolio of ETFs

with InvestSMART


FIGURE 36: DIVERSIFIED ETFS


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


GLOBAL

Balanced

[VDBA] Vanguard Diversified Balanced ETF $3.53 $4.03 0.27% N/A 0.00% 0.00% 0.25% 60.89% Multisector Balanced

Conservative

[VDCO] Vanguard Diversified Conservative ETF $1.00 $1.00 0.27% N/A 0.00% 0.00% 0.37% 54.87% Multisector Moderate

High Growth

[VDHG] Vanguard Diversified High Growth ETF $14.20 $19.25 0.27% N/A 0.00% 0.00% 0.57% 75.54% Multisector Aggressive

Growth

[VDGR] Vanguard Diversified Growth ETF $4.55 $6.57 0.27% N/A 0.00% 0.00% 0.48% 77.15% Multisector Growth

Diversified IncomePortfolio

A portfolio of ETFs giving investors a mix of multiple asset classes to achieve a sustainable income and capital protection.

Core GrowthPortfolio

A portfolio of ETFs giving investors a mix of multiple asset classes to achieve long term, stable capital growth.

Suitable for all investors as a total portfolio solution or as the core of an investment plan.

https://www.investsmart.com.au/invest-with-us/investsmart-diversified-income-model/1

https://www.investsmart.com.au/invest-with-us/investsmart-core-growth-model/4


This group of securities provides the investor with broad-based as well

as specific sector exposure across domestic and international equity

markets. There are an increasing number of ETFs designed to achieve

specific rules-based objectives, for example High Yield, Ethical, Value,

Momentum.

We hold positions in IAA, IVV, VEQ, VEU, UMAX & IOZ InvestSMART’s

Separately Managed Account (SMA) portfolios.

Overview

Equity focused ETFs saw close to $2bn in net inflows in Dec Qtr on the

back of strong equity market performance globally. These sentiments

were shared in the domestic market with the iShares Core S&P ASX 200

ETF (IOZ) seeing huge inflows of over $500m.

In terms of performance, on a Geographic basis ETFs exposed to US and

Asian markets saw the best returns for the quarter.

FIGURE 37: EQUITY ETFS BY GEOGRAPHY

Securities Overview Equities

2.9

FUM


Qtr Flows

Avg. MER

3mth Avg. Return

Qtr Avg. Spread

12mth Avg. Return

No. Funds

$27,954m

2.78%

+$1998.8m

0.52%

6.71%

0.27%

13.43%

118

Equities ETF Highlights

Source: ETF Issuers

42



FIGURE 38: EQUITY ETFS EUROPE


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


EUROPE

Equities – Broad

[ESTX] ETFS EURO STOXX 50? ETF $51.09 $26.55 0.35% 0.19% –0.46% 15.13% 1.15% 27.89% Equity Europe

[HEUR] BetaShares WisdomTree Europe ETF-Ccy Hdg

$53.62 $5.15 0.58% 0.18% –1.15% 14.10% 1.44% 15.01% Equity Europe

[IEU] iShares Europe ETF (AU) $775.57 $61.07 0.60% 0.13% 8.58% 26.20% 2.07% 5.98% Equity Europe

[VEQ] Vanguard FTSE Europe Shares ETF $141.52 $22.80 0.35% 0.19% 2.17% 16.94% 2.22% 9.03% Equity Europe

Equities – Strategy

[UBE] UBS IQ MSCI Europe Ethical ETF $10.23 $1.10 0.40% 0.34% 2.35% 16.18% 2.41% 5.75% Equity Europe

FIGURE 39: BREAKDOWN – EQUITY ETFS EMERGING MARKETS


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


EMERGING MARKETS

Equities – Broad

[IBK] iShares MSCI BRIC ETF (AU) $35.46 $1.01 0.72% 0.70% 8.98% 31.61% 1.31% 7.34% Equity Emerging Markets

[IEM] iShares MSCI Emerging Markets ETF (AU) $610.00 $19.69 0.72% 0.16% 7.68% 28.37% 1.63% 7.48% Equity Emerging Markets

[VGE] Vanguard FTSE Emerging Markets Shrs ETF

$180.06 $30.38 0.48% 0.28% 6.05% 20.88% 1.67% 11.77% Equity Emerging Markets

[WEMG] SPDR? S&P Emerging Markets ETF $17.21 –$4.14 0.65% 0.27% 7.27% 24.59% 1.29% 20.95% Equity Emerging Markets



FIGURE 40: EQUITY ETFS USA


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


USA

Equities – Broad

[IJH] iShares S&P Mid-Cap ETF $124.84 –$2.81 0.07% 0.30% 15.10% 15.24% 1.01% 9.26% Equity North America

[IJR] iShares S&P Small-Cap ETF $108.52 $10.34 0.07% 0.51% 17.61% 14.39% 1.02% 6.02% Equity North America

[IRU] iShares Russell 2000 ETF (AU) $76.59 $7.63 0.20% 0.50% 15.14% 15.09% 1.06% 5.74% Equity North America

[IVV] iShares S&P 500 ETF $2,504.48 $16.30 0.04% 0.05% 12.45% 19.48% 1.49% 5.25% Equity North America

[NDQ] BetaShares NASDAQ 100 ETF $247.80 $42.86 0.48% 0.11% 7.43% 22.28% 0.41% 11.33% Equity North America

[QUS] BetaShares FTSE RAFI US 1000 ETF $39.62 $6.34 0.40% 0.14% 6.73% 6.97% 2.13% 11.89% Equity North America

[SPY] SPDR? S&P 500 ETF $19.58 –$2.15 0.09% 0.14% 12.45% 19.37% 1.59% 20.38% Equity North America

[VTS] Vanguard US Total Market Shares ETF $1,179.95 $38.10 0.04% 0.08% 6.15% 11.62% 1.46% 4.46% Equity North America


[GGUS] BetaShares Geared US Eq- Ccy Hdg $14.38 $3.12 0.80% 0.11% 14.07% 45.14% 0.62% 47.54%Equity World - Currency Hedged

[IHVV] iShares S&P 500 AUD Hedged ETF $103.01 $9.14 0.10% 0.10% 6.86% 21.94% 1.74% 12.02% Equity North America

[UBU] UBS IQ MSCI USA Ethical ETF $6.37 $– 0.20% 0.21% 6.77% 12.03% 1.88% 5.12% Equity North America

[UMAX] BetaShares S&P 500 Yield Maximiser $92.98 –$1.76 0.79% 0.16% 3.98% 6.93% 4.08% 4.68% Equity World Other

[ZYUS] ETFS S&P 500 High Yield Low Volatil ETF $57.56 $3.16 0.35% 0.18% 4.43% 2.25% 6.04% 8.19% Equity North America

[BBUS] BetaShares US Eqs Strong Bear H-Ccy Hdg

$56.10 –$4.88 1.38% 0.20% –14.16% –36.75% 0.00% 19.04% Alternative Strategies

44


FIGURE 41: EQUITY ETFS ASIA


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


ASIA

Equities – Broad

[CETF] Market Vectors ChinaAMC A-Share ETF(Syn)

$9.43 $4.08 0.72% 0.43% 5.92% 20.76% 0.92% 40.99% Equity Greater China

[HJPN] BetaShares WisdomTree Japan ETF-Ccy Hdg

$78.12 $25.50 0.58% 0.18% 9.32% 22.81% 2.15% 26.34% Equity Japan

[IAA] iShares Asia 50 ETF (AU) $386.29 $31.16 0.50% 0.45% 12.02% 33.60% 1.25% 5.88%Equity Asia Pacific w/o Japan

[IHK] iShares MSCI Hong Kong ETF (AU) $16.95 $4.63 0.48% 0.98% 7.91% 20.13% 3.78% 17.99% Equity World Other

[IJP] iShares MSCI Japan ETF (AU) $206.00 $10.52 0.48% 0.24% 14.68% 20.51% 1.08% 10.98% Equity Japan

[IKO] iShares MSCI South Korea ETF (AU) $40.59 –$8.30 0.64% 0.68% 14.76% 37.11% 2.51% 8.33% Equity World Other

[ISG] iShares MSCI Singapore ETF $6.42 –$2.51 0.48% 0.71% 11.63% 26.79% 2.99% 7.41% Equity World Other

[ITW] iShares MSCI Taiwan ETF $45.24 –$16.59 0.64% 1.05% 3.16% 19.26% 2.43% 10.61% Equity World Other

[IZZ] iShares China Large-Cap ETF (AU) $92.54 $7.88 0.74% 0.51% 9.17% 22.86% 1.99% 13.71% Equity Greater China

[VAE] Vanguard FTSE Asia ex Japan Shrs Idx ETF $52.89 $14.52 0.40% 0.26% 8.90% 28.15% 2.80% 22.03%Equity Asia Pacific w/o Japan

[PAXX] Platinum Asia (Quoted Managed Hdg) $69.79 $36.65 1.10% N/A 9.09% 0.00% 0.00% 22.27%Equity Asia Pacific w/o Japan

Not rated


[UBJ] UBS IQ MSCI Japan Ethical ETF $4.47 $0.96 0.40% 0.23% 8.77% 14.43% 1.38% 5.12% Equity Japan

[UBP] UBS IQ MSCI Asia APEX 50 Ethical ETF $8.91 $4.64 0.45% 0.37% 8.10% 37.15% 0.32% 47.55%Equity Asia Pacific w/o Japan



FIGURE 42: EQUITY ETFS AUSTRALIA – PART 1


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


AUSTRALIA

Equities – Broad

[EX20] BetaShares Aus Ex-20 Port Divrs ETF $22.93 $8.73 0.25% 0.17% 8.84% 18.20% 2.09% 25.74%Equity Australia Large Blend

[ILC] iShares S&P/ASX 20 ETF $323.86 –$6.60 0.24% 0.08% 6.06% 7.04% 4.93% 4.45%Equity Australia Large Blend

[IOZ] iShares Core S&P/ASX 200 ETF $1,286.08 $510.71 0.15% 0.06% 7.59% 11.60% 3.61% 20.01%Equity Australia Large Blend

[ISO] iShares S&P/ASX Small Ordinaries ETF $82.34 $8.82 0.55% 0.31% 13.43% 19.30% 2.01% 8.60%Equity Australia Mid/Small Blend

[MVE] VanEck Vectors S&P/ASX MidCap ETF $62.50 $8.33 0.45% 0.17% 11.72% 21.42% 3.61% 8.36%Equity Australia Mid/Small Blend

[MVS] VanEck Vectors Small Coms Masters ETF $69.92 $2.41 0.49% 0.18% 10.51% 14.38% 3.10% 4.07%Equity Australia Mid/Small Blend

[MVW] VanEck Vectors Australian Equal Wt ETF $422.23 $74.01 0.35% 0.08% 9.46% 15.54% 3.01% 12.65%Equity Australia Large Blend

[QOZ] BetaShares FTSE RAFI Australia 200 ETF $319.25 $28.54 0.40% 0.10% 7.29% 11.27% 3.91% 15.26%Equity Australia Large Blend

[SFY] SPDR? S&P/ASX 50 ETF $485.47 $18.40 0.29% 0.05% 6.36% 9.26% 4.59% 4.93%Equity Australia Large Blend

[SSO] SPDR? S&P/ASX Small Ordinaries ETF $16.46 $– 0.50% 0.15% 13.58% 19.56% 2.46% 5.37%Equity Australia Mid/Small Blend

[STW] SPDR? S&P/ASX 200 ETF $3,587.34 $69.51 0.19% 0.04% 7.68% 11.70% 4.10% 7.73%Equity Australia Large Blend

[VAS] Vanguard Australian Shares ETF $2,661.32 $78.65 0.14% 0.04% 7.68% 11.81% 3.44% 7.31%Equity Australia Large Blend

[VLC] Vanguard MSCI Australian Large Coms ETF

$81.99 $5.08 0.20% 0.05% 6.30% 7.81% 4.04% 11.40%Equity Australia Large Blend

[VSO] Vanguard MSCI Australian Small Coms ETF

$140.71 $22.00 0.30% 0.10% 11.89% 17.99% 3.59% 10.26%Equity Australia Mid/Small Blend

46




($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


AUSTRALIA

Equities – Broad

[ZOZI] ETFS S&P/ASX 100 ETF $8.66 –$2.10 0.24% 0.19% 6.98% 10.75% 4.73% 12.01%Equity Australia Large Blend

Equities – Sector

[MVB] VanEck Vectors Australian Banks ETF $28.39 $1.19 0.28% 0.08% 2.63% 4.51% 5.56% 11.55% Equity Australia Other

[MVR] VanEck Vectors Australian Resources ETF $37.64 $4.95 0.35% 0.12% 14.28% 27.85% 2.88% 10.37% Equity Australia Other

[OZF] SPDR? S&P/ASX 200 Fincls EX A-REIT ETF $72.72 $10.53 0.40% 0.10% 0.97% 2.07% 4.86% 18.96% Equity Australia Other

[OZR] SPDR? S&P/ASX 200 Resources ETF $58.84 $12.46 0.40% 0.16% 15.48% 25.49% 2.13% 12.00% Equity Australia Other

[QFN] BetaShares S&P/ASX200 Fincls Sect ETF $34.08 $15.48 0.39% 0.13% 3.54% 4.63% 3.79% 26.02% Equity Australia Other

[QRE] BetaShares S&P/ASX200 Res Sect ETF $76.39 $53.12 0.39% 0.25% 15.44% 25.37% 1.33% 38.00% Equity Australia Other


[AUMF] iShares Edge MSCI Australia Mltfctr ETF $7.00 $– 0.30% 0.19% 8.35% 15.38% 4.05% 13.71%Equity Australia Large Blend

[AUST] BetaShares Managed Risk Australian Share

$26.50 –$6.52 0.49% 0.12% 7.13% 9.62% 4.01% 8.72%Equity Australia Large Blend

[BBOZ] BetaShares Australian Eqs Strong BearHdg

$90.27 $9.44 1.38% 0.12% –15.51% –20.18% 0.00% 44.00% Alternative Strategies

[BEAR] BetaShares Aus Equities Bear Hedge $55.93 $4.31 1.38% 0.11% –6.74% –8.69% 0.00% 16.23% Alternative Strategies

[DIV] UBS IQ Morningstar Australia Div Yld ETF $28.31 –$1.77 0.30% 0.18% 8.35% 11.88% 3.89% 3.96%Equity Australia Large Growth

[ETF] UBS IQ Morningstar Australia Quality ETF $10.71 –$17.52 0.30% 0.17% 8.02% 12.37% 1.44% 115.89%Equity Australia Large Blend

[FDIV] VanEck Vectors S&P/ASX Franked Div ETF $3.94 $0.01 0.35% 0.16% 7.16% 5.89% 5.32% 8.67%Equity Australia Large Blend





($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


AUSTRALIA


[GEAR] BetaShares Geared Australian Equity(Hdg)

$60.66 –$13.24 0.80% 0.11% 15.68% 21.45% 6.16% 53.57%Equity Australia Large Geared

[IHD] iShares S&P/ASX Dividend Opps ETF $270.58 $7.40 0.30% 0.12% 6.12% 8.63% 5.14% 4.42%Equity Australia Large Value

[MVOL] iShares Edge MSCI Australia Mini Vol ETF

$6.74 $0.00 0.30% 0.14% 7.05% 11.81% 4.43% 1.49%Equity Australia Large Blend

[RARI] Russell Inv Australian Rspnb Inv ETF $64.95 –$3.78 0.45% 0.24% 5.81% 8.54% 5.30% 10.39%Equity Australia Large Value

[RDV] Russell Inv High Dividend Aus Shrs ETF $294.50 $3.95 0.34% 0.08% 5.86% 9.50% 5.41% 3.54%Equity Australia Large Value

[RVL] Russell Inv Australian Value ETF $13.53 $– 0.34% 0.08% 8.23% 5.77% 4.41% 2.88%Equity Australia Large Value

[SMLL] BetaShares Australian Small Coms Sel $15.55 $3.10 0.39% 0.53% 10.89% 0.00% 1.18% 12.68%Equity Australia Mid/Small Blend

[SWTZ] Switzer Dividend Growth $77.67 $0.71 0.89% 0.49% 5.10% 0.00% 3.19% 3.91%Equity Australia Large Growth

Not rated

[SYI] SPDR? MSCI Australia Sel Hi Div Yld ETF $188.25 –$2.69 0.35% 0.07% 3.74% 6.50% 4.91% 8.59%Equity Australia Large Value

[UBA] UBS IQ MSCI Australia Ethical ETF $176.89 –$1.01 0.17% 0.16% 7.13% 11.02% 3.99% 0.31%Equity Australia Large Blend

[VHY] Vanguard Australian Shares High Yld ETF $1,034.98 $82.48 0.25% 0.06% 3.63% 9.87% 6.76% 5.98%Equity Australia Large Blend

[YMAX] BetaShares Aus Top 20 Eq Yld Maxmsr $405.20 –$8.35 0.79% 0.18% 5.01% 6.51% 8.46% 10.96%Equity Australia Large Blend

[ZYAU] ETFS S&P/ASX 300 High Yield Plus ETF $43.68 $14.26 0.35% 0.19% 4.08% 12.43% 9.95% 15.24%Equity Australia Large Blend

48



FIGURE 43: EQUITY ETFS GLOBAL – PART 1


($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


GLOBAL

Equities – Broad

[IHOO] iShares Global 100 AUD Hedged ETF $36.78 $5.16 0.43% 0.34% 6.00% 20.43% 11.15% 7.84%Equity World - Currency Hedged

[IHWL] iShares Core MSCI World All Cap AUDH ETF

$9.24 $1.30 0.19% 0.25% 5.38% 19.32% 1.07% 9.43%Equity World - Currency Hedged

[IOO] iShares Global 100 ETF (AU) $1,338.17 $18.09 0.40% 0.12% 11.97% 23.26% 1.92% 3.43% Equity World Large Blend

[IVE] iShares MSCI EAFE ETF (AU) $307.31 $4.28 0.33% 0.24% 9.78% 23.68% 2.22% 11.58% Equity World Large Blend

[IWLD] iShares Core MSCI World All Cap ETF $20.23 $5.04 0.16% 0.26% 5.62% 12.68% 1.45% 10.45% Equity World Large Blend

[KII] K2 Global Equities Fund (Hedge Fund) $20.33 –$2.21 2.70% 1.37% 6.49% 18.22% 0.00% 4.04% Alternative Strategies Not Rated

[MGE] Magellan Global Equities $980.89 $36.48 1.35% 0.42% 6.51% 14.19% 1.65% 3.38% Equity World Large Blend Not Rated



($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


AUSTRALIA


[HVST] BetaShares Australian Div Harvester(mgd)

$272.72 –$71.36 0.90% 0.10% 1.64% –9.07% 11.23% 15.94%Equity Australia Large Value

[KSM] K2 Australian Small Cap Fund $16.55 –$2.02 2.70% 1.25% 8.66% 19.98% 9.61% 5.19% Alternative Strategies Not Rated

[FAIR] BetaShares Australian Sustnby Ldrs ETF $53.03 $53.03 0.49% N/A 0.00% 0.00% 0.24% 17.76%Equity Australia Large Blend

Get international exposure with the InvestSMART International Equities Portfolio

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($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


GLOBAL

Equities – Broad

[MHG] Magellan Global Equities Currency Hdg $63.10 $4.87 1.35% 0.57% 6.30% 22.99% 1.63% 4.37%Equity World - Currency Hedged

Not rated

[QUAL] VanEck Vectors MSCI Wld ex Aus Qlty ETF

$321.43 $33.94 0.40% 0.13% 7.34% 16.56% 2.90% 6.84% Equity World Large Blend

[UBW] UBS IQ MSCI World ex Australia Ethcl ETF $25.29 $0.98 0.35% 0.22% 5.73% 13.12% 1.77% 5.82% Equity World Large Blend

[VEU] Vanguard All-World ex-US Shares ETF $1,092.46 $56.73 0.11% 0.11% 4.17% 16.80% 2.40% 4.62% Equity World Large Blend

[VGAD] Vanguard MSCI Index Intl (Hdg) ETF $374.13 $45.43 0.21% 0.08% 5.52% 19.95% 4.85% 10.70%Equity World - Currency Hedged

[VGS] Vanguard MSCI Index Intl ETF $832.19 $106.67 0.18% 0.07% 5.80% 13.41% 2.71% 10.00% Equity World Large Blend

[WXHG] SPDR? S&P World ex Australia(Hedged) ETF

$79.39 $3.35 0.35% 0.23% 5.50% 20.10% 2.83% 4.28%Equity World - Currency Hedged

[WXOZ] SPDR? S&P World ex Australia ETF $164.39 $1.67 0.30% 0.18% 5.96% 13.88% 2.17% 1.76% Equity World Large Blend

[PIXX] Platinum International (Quoted Mngd Hdg)

$124.97 $82.46 1.10% N/A 6.55% 0.00% 0.00% 31.50% Equity World Large Blend Not rated

Equities – Sector

[BNKS] BetaShares Glb Banks ETF-Ccy Hdg $73.72 $14.77 0.57% 0.26% 4.98% 18.71% 2.05% 15.26% Equity World Other

[DRUG] BetaShares Glb Healthcare ETF-Ccy Hdg $24.42 $2.20 0.57% 0.31% 0.65% 17.56% 0.30% 10.73% Equity World Other

[FOOD] BetaShares Glb Agltr Coms ETF-Ccy Hdg $17.37 $3.65 0.57% 0.32% 5.51% 16.07% 1.05% 22.06% Equity World Other

[FUEL] BetaShares Glb Energy Coms ETF-Ccy Hdg

$12.12 $4.60 0.57% 0.27% 6.18% 3.51% 3.72% 25.90% Equity Global Resources

[GDX] Market Vectors Gold Miners ETF $63.62 $1.17 0.53% 0.34% 1.51% 2.89% 0.64% 5.69% Equity Global Resources

[HACK] Betashares Global Cybersecurity ETF $55.61 $8.00 0.67% 0.26% 5.83% 9.39% 2.48% 16.79% Equity Global Technology

50




($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


GLOBAL

Equities – Sector

[IXI] iShares Global Consumer Staples ETF (AU) $122.13 –$13.48 0.47% 0.36% 7.03% 15.27% 1.89% 4.52% Equity World Other

[IXJ] iShares Global Healthcare ETF (AU) $487.31 –$0.66 0.47% 0.28% 6.97% 19.25% 1.26% 2.91% Equity World Other

[IXP] iShares Global Telecom ETF (AU) $49.67 $29.28 0.47% 0.69% 6.08% 7.78% 2.93% 52.75% Equity World Other

[MNRS] BetaShares Glb Gold Miners ETF-Ccy Hdg

$5.29 $– 0.57% 0.48% –0.29% 1.61% 0.44% 22.92% Equity Global Resources

[ROBO] ETFS ROBO Glbl Robotics and Atmtn ETF

$44.84 $40.54 0.69% N/A 7.56% 0.00% 0.00% 69.27% Equity Global Technology


[DMKT] AMP Capital Dynamic Markets ETF (Hedge)

$25.53 $5.30 0.50% 0.70% 2.70% 5.27% 4.81% 8.44% Multisector Balanced Not rated

[ETHI] BetaShares Global Sstnbty Ldrs ETF $126.39 $27.97 0.59% 0.23% 6.06% 0.00% 1.31% 15.28% Equity World Large Blend

[GROW] Schroder Real Return ETF $45.25 $2.42 0.90% 0.48% 2.14% 4.56% 2.54% 4.15% Multisector Balanced Not rated

[MOAT] Market Vectors Morningstar Wide Moat ETF

$51.40 $0.41 0.49% 0.28% 5.52% 12.86% 0.90% 11.55% Equity North America

[QMIX] SPDR? MSCI World Quality Mix $7.26 $– 0.40% 0.28% 6.89% 13.27% 2.25% 3.80% Equity World Large Blend

[TECH] ETFS Morningstar Global Technology ETF $29.25 $13.98 0.45% 0.33% 6.12% 0.00% 0.84% 22.15% Equity Global Technology

[WDIV] SPDR? S&P Global Dividend ETF $161.12 $12.40 0.50% 0.20% 5.16% 8.84% 3.96% 9.67% Equity World Large Value

[WDMF] iShares Edge MSCI World Multifactor ETF

$23.54 $4.98 0.35% 0.45% 7.09% 17.89% 4.40% 10.71% Equity World Large Blend

[WRLD] BetaShares Managed Risk Global Share $42.27 –$2.37 0.54% 0.18% 5.39% 11.99% 0.99% 12.30% Multisector Aggressive





($m) MER

Qtr Avg Spread

3Mth Return

12Mth Return

Historical Yield

Qtr Avg Liquidity


GLOBAL


[WVOL] iShares Edge MSCI World Minimum Vol ETF

$12.40 $– 0.30% 0.46% 5.44% 8.87% 2.49% 4.68% Equity World Large Blend

[MOGL] Montgomery Global Equities Fund (Managed Fund)

$62.58 $62.58 1.89% N/A 0.00% 0.00% 0.00% 14.35% Equity World Large Value Not rated

Get international exposure with the InvestSMART International Equities Portfolio

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QVB NSW 1230

Australia

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