Asian share ETFs outperforming every other region

Posted: 7 June 2018 10:54 am
Chris Brycki close up 450

CEO and founder of Stockspot Chris Brycki. Image supplied.

Asian share ETFs had average returns of 18.9% for the year compared to 2.1% for Australian share ETFs, according to Stockspot report.

Asian share exchange traded funds (ETFs) had the strongest average returns of any other region over the past 12 months, delivering an impressive 18.9% on average. Asian share ETFs also grew their total funds under management by 52.8% to $1 billion, according to Stockspot's fourth annual Australian ETF Report released today. The report is the largest independent look into the local ETF landscape comparing 178 ASX-listed ETFs by performance returns and funds under management.

Four out of the top five best performing ETFs for returns were Asian share ETFs. The best performer was ASX:UBP, an index fund issued by UBS that mirrors the performance of the MSCI Asia APEX 50 ex Tobacco ex Controversial Weapons Index. The Index tracks the 50 largest stocks in the Asia region (ex Japan) and excludes companies invested in tobacco, weapons and ammunition manufacturing.

The ETF which delivered the worst returns for the year was ASX:HVST, the BetaShares Australian Dividend Harvester Fund. This ETF invests in large ASX-listed, dividend-paying stocks and generated an annual return of -16.2%. The ETF also lost more than $200 million in funds under management over the year.

Best and worst performing ETFs for returns

CEO and founder of Stockspot Chris Brycki said investors were turning to ETFs for their low-cost and easy access to global stocks. “The mainstream take-up of ETFs shows they are fast becoming the go-to investment choice for Australians who have a growing awareness of the impact of costs in a low return environment. They are turning to ETFs for better returns than cash or term deposits but with lower risk than actively managed funds or direct shares," said Brycki.

“It’s important to note that investors have flocked to global ETFs for greater diversification. The fact that Australian shares only represent around 1.7% of the world’s total share market value highlights the need for global shares in a diversified portfolio."

The report highlights the growing popularity of ETFs, with ETF funds under management increasing by 33% to $36.2 billion over the year. Of the 23 new ETFs added to the ASX over the past 12 months, 18 were global or fixed income ETFs. A large number of these new ETF listings were active ETFs, but active ETFs have largely failed to match the return of their respective benchmark index ETFs.

In light of the report analysis, Stockspot will add five new ETFs to its portfolio including: VanEck Vectors FTSE Global Infrastructure ETF (IFRA), the iShares S&P Global Consumer Staples ETF (IXI), The VanEck Vectors Gold Miners ETF (GDX), the iShares S&P Global Healthcare ETF (IXJ) and the BetaShares NASDAQ 100 ETF (NDQ).

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