Thematic ETFs to grow to $10 billion FUM by year's end
May 2021
Funds are pouring into thematic ETF sector on the ASX and Arian Neiron, VanEck Chief Executive and Managing Director - Asia Pacific, says the acceleration of flows will push thematic funds under management (FUM) to $10 billion by the year’s end.
Sydney, 17 May 2021 – Funds are pouring into thematic ETF sector on the ASX and Arian Neiron, VanEck Chief Executive and Managing Director - Asia Pacific, says the acceleration of flows will push thematic funds under management (FUM) to $10 billion by the year’s end.
Over the six months to 30 April 2021, FUM in thematic ETFs grew by 70.8% to $4.3 billion, while FUM in sustainable ETFs jumped 62.8% to $3.52 billion. That growth easily exceeded growth in FUM of ASX-listed market capitalisation ETFs which grew by 33.4% to $66.1 billion. Growth in VanEck thematics ETFs grew by even more, at 92.8% to a FUM of $182.5 million.
Neiron, said: “This is the next chapter for the ETF market, the growth of thematic ETFs which is underpinned by sustainable long-term trends in which momentum is building. These offer investment strategies that capitalise on enduring economic trends or themes, with technology, clean energy and healthcare favoured among investors.
“VanEck’s Video Gaming and eSports ETF (ASX: ESPO), for example, has been our quickest growing ETF since we first launched our funds in Australia in 2014. ESPO is Australia’s first and only dedicated video gaming and esports ETF and has drawn FUM of around $100 million in just seven months. We expect FUM to grow by the year’s end given the popularity of gaming with retail investors.
“The industry’s growth has been strong in recent years and COVID-19 lockdowns and other social restrictions have accelerated its expansion. The sector offers returns which outstrip those on technology. Based on back-testing, ESPO's index (the MVIS Global Video Gaming & eSports Index), adjusted for ESPO's management cost of 0.55% p.a., has outpaced the tech-heavy NASDAQ 100 index over the seven year period since 2014 with around double the returns.
“Another huge structural growth theme is clean energy. The Paris climate agreement is driving demand for green, renewable energy across the globe. The transition away from scarce fossil fuels is inevitable and a significant trend offering huge investment potential. VanEck's Global Clean Energy ETF, CLNE, will allow investors to leverage that important trend in their portfolios,” Neiron said.
”Another sector where we are seeing significant investment opportunities is global healthcare. Even before COVID-19, health spending was rising strongly across nations given ageing demographics and emerging nations’ healthcare systems catching up to developed nations’. Investors are likely to reap the benefits of the healthcare expansion and rising investment.
“Global healthcare expenditure accounted for around 10% of the world’s GDP, or US$11 trillion, as at 2018. With global GDP projected to grow to US$137 trillion by 2030, and healthcare expenditures projected to remain at 10% of GDP, this translates into US$14 trillion in healthcare spending per year by the end of this decade,” said Neiron.
“With ASX-listed thematic ETFs, which are accessible, liquid and low cost, investors can position their portfolios to take advantage of these important economic and secular trends that are shaping the future.”
ENDS
About VanEck
VanEck is one of the world’s largest issuers of ETFs, managing in excess of $70 billion globally for individual and institutional investors. Founded in New York in 1955, VanEck is a pioneer in international investing and in gold funds, launching the first gold equities fund and the first gold ETF in the US.
In Australia, we have 28 ETFs on ASX that focus on delivering superior performance through beyond-the-usual approaches and providing access to asset classes typically unavailable to Australian investors.
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VanEck Investments Limited ACN 146 596 116 AFSL 416755 (‘VanEck’) is the responsible entity and issuer of units in the VanEck Vectors Global Healthcare Leaders ETF (HLTH), VanEck Vectors Global Clean Energy ETF (CLNE), and VanEck Vectors Video Gaming and eSports ETF (ESPO). Nothing in this content is a solicitation to buy or an offer to sell shares of any investment in any jurisdiction including where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. This is general advice only, not personal financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Read the PDS and speak with a financial adviser to determine if the fund is appropriate for your circumstances. The PDS’s are available here.
An investment in HLTH carries risks associated with: financial markets generally, individual company management, industry sectors, ASX trading time differences, foreign currency, country or sector concentration, political, regulatory and tax risks, fund operations and tracking an index. See the PDS for details. No member of the VanEck group of companies guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from any fund.
An investment in CLNE carries risks associated with: ASX trading time differences, financial markets generally, individual company management, industry sectors, foreign currency, emerging markets, country or sector concentration, political, regulatory and tax risks, fund operations, liquidity and tracking an index. See the PDS for details. No member of the VanEck group of companies guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from any fund.
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MVIS Global Video Gaming and eSports Index (AUD) (‘MVIS Index’) is the exclusive property of MV Index Solutions GmbH based in Frankfurt, Germany (‘MVIS’). MVIS is a related entity of VanEck. MVIS makes no representation regarding the advisability of investing in the Fund. MVIS has contracted with Solactive AG to maintain and calculate the MVIS Index. Solactive uses its best efforts to ensure that the MVIS Index is calculated correctly. Irrespective of its obligations towards MVIS, Solactive has no obligation to point out errors in the MVIS Index to third parties.
1OECD, Health at a Glance 2019