Australian Exchange Traded Fund Report

Transcription

1 Australian Exchange Traded Fund Report DECEMBER QUARTER

2 T: Copyright InvestSMART Group Limited (ABN ; ASX: INV) operates four Australian Financial Service Licences (AFSL): InvestSMART Publishing Pty Ltd (AFSL , ABN ); InvestSMART Financial Services Pty Limited (AFSL , ABN ); InvestSMART Funds Management Limited (AFSL , ABN ) and Ziel Two Pty Ltd (AFSL , ABN ). The following entities are Corporate Authorised Representatives (CAR): Eureka Report Pty Limited ABN CAR (No ); InvestSMART Insurance Pty Limited ABN CAR (No ); YourShare Financial Services Pty Limited ABN CAR (No ); The Intelligent Investor Holdings Pty Limited CAR (No ). 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 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.

3 Contents Introduction About this report 4 About InvestSMART 6 InvestSMART Star Rating 8 Highlights So which ETF is the best? 10 The Active vs Passive debate 15 Market Overview Funds under management (FUM) 18 Flows 21 Costs 23 Performance 25 Yield 27 Security Overview Commodities 29 Currency 31 Property & Infrastructure 33 Fixed Income & Cash 36 Diversified 39 Equities 41

4 InvestSMART Australian ETF Report December Quarter 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 About this report 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.

5 InvestSMART Australian ETF Report December Quarter 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

6 InvestSMART Australian ETF Report December Quarter 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 About InvestSMART 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.

7 InvestSMART Australian ETF Report December Quarter 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 Income Portfolio Core Growth Portfolio A portfolio of ETFs giving investors a mix of multiple asset classes to achieve a sustainable income and capital protection. A portfolio of ETFs giving investors a mix of multiple asset classes to achieve long term, stable capital growth.

8 InvestSMART Australian ETF Report December Quarter 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. InvestSMART Star Rating 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.

9 InvestSMART Australian ETF Report December Quarter FIGURE 2: INVESTSMART STAR RATING CRITERIA FIGURE 3: NUMBER OF ETFS PER STAR RATING Factor Description Star Rating Number of ETFs Size Funds under management. 8 Fees Fund management fees as a percentage of FUM. 36 Liquidity Trading volumes. 61 Spread The average percentage difference between the bid & ask. 52 Tracking Error The difference in the return profile of the Fund to its benchmark. 2 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 Not Rated 14 Total 173 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.

10 InvestSMART Australian ETF Report December Quarter 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. So which ETF is best? 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.

11 InvestSMART Australian ETF Report December Quarter FIGURE 4: AVERAGE ASSET ALLOCATION FOR PORTFOLIOS SUB $250K 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: 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% Source: Information has been collated from de-identified data through InvestSMART s Portfolio Manager and HealthCheck TM Comparison has been made to a model asset allocation as determined by InvestSMART Group. 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 HealthCheck TM we assist our clients in understanding how their portfolio is currently positioned and whether it is appropriate in achieving their objectives. Property 6% 11% Increase by 5% Cash 11% 12% Increase by 1% Fixed Interest 3% 33% Increase by 30% Source: Information has been collated from de-identified data through InvestSMART s Portfolio Manager and HealthCheck TM Comparison has been made to a model asset allocation as determined by InvestSMART Group. 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.

12 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

13 InvestSMART Australian ETF Report December Quarter 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. FIGURE 7: GLOBAL EQUITY ETFS Source, InvestSMART ETF Filtering Tool 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.

14 Step 1 Step 2 Step 3 Step 4 Load Your Holdings to Portfolio Manager InvestSMART HealthCheckTM Use ETF Filter Due Diligence Load your current holdings/ portfolio into InvestSMART s Portfolio Manager Determine your investment objectives and identify where the holes exist in your Asset Allocation Use InvestSMART s ETF Filtering tool to identify ETFs that will provide the exposure you need Review each ETF in greater detail to determine whether it suits your objectives InvestSMART Portfolio Manager Track any security and over 8,000 funds A simple way to monitor your investments in one easy place for free

15 InvestSMART Australian ETF Report December Quarter 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 The Active vs Passive debate 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).

16 16 FIGURE 8: PASSIVE VS ACTIVE STRATEGIES FIGURE 9: BENEFITS OF A LISTED FUND Where an allocation to passive strategies is suitable Where an allocation to active strategies is suitable Benefits to Investors Benefits to Fund Managers Generic markets where mispricing is uncommon As the core building blocks to a diversified portfolio For investors who lack the time or skill to time markets Markets where mispricing exists Where a manager shows history of consistent outperformance Coming back to ETFs and contrary to common belief, no longer are all No minimum investment barriers Ability to buy & sell as easily as any other listed security Pricing transparency Intra day pricing rather than end-of-day Open ended Reduced paperwork Available on platforms/wrap accounts Distribute to direct investor 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. 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 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.

17 InvestSMART Australian ETF Report December Quarter 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 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 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% $ MGE Magellan Global Equities Fund Global Equities Equity World Large Blend 1.35% 0.41% 1.76% $ 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 GLIN RENT AMP Capital Global Infrastructure Securities Fund Unhdg AMP Capital Global Property Securities Fund Unhdg Global Property & Infrastructure Infrastructure - Global 0.85% 0.62% 1.47% $28.24 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% $ Note: N/A indicates insufficient data due to recent listing Source: MorningStar, ASX 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.

18 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 $9, $ 10, % Vanguard $8, $10, % State Street $5, $5, % Betashares $4, $4, % Magellan 3 3 $1, $1, % VanEck $ $ % Russell 6 6 $ $ % ETFS Securities $ $ % Market Vectors 4 4 $ $ % UBS 9 9 $ $ % Platinum 2 2 $ $ % Switzer 1 1 $73.70 $ % Montgomery 0 1 $ $ % Schroder 1 1 $41.90 $ % K2 Asset Management 2 2 $38.36 $ % Source: MorningStar, ASX $31, $35, %

19 InvestSMART Australian ETF Report December Quarter 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 Diversified Diversified 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 Diversified Diversified 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 20 FIGURE 13: AUSTRALIAN ETF MARKET BREAKDOWN Asset Class Geography Issuer The largest asset class in terms of both product range as well as FUM is equities, representing over 75% of the market. Geographically, the largest exposure for ETFs across the market is Australia, followed by those providing diversified global exposure. 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.

21 InvestSMART Australian ETF Report December Quarter Market Overview Flows Fund 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. FIGURE 14: FUM FLOWS & TURNOVER 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 CLASS

22 22 FIGURE 16: LARGEST INFLOWS (QTR) FIGURE 17: LARGEST OUTFLOWS (QTR) ETF Flows ($m) Sub Category ETF Qtr Flows ($m) Sub Category [IOZ] ishares Core S&P/ASX 200 ETF $ Blend [HVST] BetaShares Australian Div Harvester(mgd) $71.36 Value [VGS] Vanguard MSCI Index Intl ETF $ Equity World Large Blend [USD] BetaShares US Dollar ETF $33.87 Miscellaneous [VHY] Vanguard Australian Shares High Yld ETF [PIXX] Platinum International (Quoted Mngd Hdg) [QPON] Betashares Aus Bank Sr Fltng Rt Bd ETF $82.48 Blend $82.46 Equity World Large Blend $80.05 Diversified Credit [POU] BetaShares British Pound ETF $27.30 Miscellaneous [ETF] UBS IQ Morningstar Australia Quality ETF $17.52 Blend [ITW] ishares MSCI Taiwan ETF $16.59 Equity World Other 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. 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. 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.

23 InvestSMART Australian ETF Report December Quarter Market Overview Costs There are two main components to the total cost of an ETF. The Management Expense Ratio (MER) and the difference between FIGURE 18: COST ANALYSIS SOURCE 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.

24 24 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. FIGURE 19: FIVE CHEAPEST ETFS ETF MER 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 FIGURE 20: FIVE MOST EXPENSIVE ETFS ETF [KII] K2 Global Equities Fund (Hedge Fund) [KSM] K2 Australian Small Cap Fund MER Spread Total Cost Management Type 2.70% 1.37% 4.07% Actively Managed 2.70% 1.25% 3.95% Actively Managed [VTS] Vanguard US Total Market Shares ETF 0.04% 0.08% 0.12% Index Tracking [QAG] BetaShares Agriculture ETF CcyHgd(Synth) 0.69% 1.61% 2.30% Index Tracking [ISEC] ishares Enhanced Cash ETF 0.12% 0.01% 0.13% Smart Beta [MOGL] Montgomery Global Equities Fund (Managed Fund) 1.89% 0.28% 2.17% Actively Managed [VAS] Vanguard Australian Shares ETF 0.14% 0.04% 0.18% Index Tracking [QCB] BetaShares Com Basket ETF Ccy Hgd(Synth) 0.69% 1.43% 2.12% Index Tracking

25 InvestSMART Australian ETF Report December Quarter Market Overview Performance A passively managed ETF should closely track its underlying index. Unlike active fund mandates, negative returns do not necessarily mean the fund FIGURE 21: 3, 6 AND 12 MONTH PERFORMANCE 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.

26 26 FIGURE 22: TOP FIVE PERFORMING SECURITIES ETF Historical Yield Sub Category [HVST] BetaShares Australian Div Harvester(mgd) 11.23% Equity Australia Large Value FIGURE 23: WORST FIVE PERFORMING SECURITIES ETF 3 Mth Sub Category [BBOZ] BetaShares Australian Eqs Strong BearHdg 15.51% Alternative Strategies [IHOO] ishares Global 100 AUD Hedged ETF 11.15% Equity World - Currency Hedged [BBUS] BetaShares US Eqs Strong Bear H-Ccy Hdg 14.16% Alternative Strategies [VCF] Vanguard Intl Credit Secs Idx (Hdg) ETF 10.29% Diversified Credit [VIF] Vanguard Intl Fxd Intr Idx (Hdg) ETF 10.17% Bonds - Global [BEAR] BetaShares Aus Equities Bear Hedge 6.74% Alternative Strategies [QAG] BetaShares Agriculture ETF CcyHgd(Synth) 3.72% Miscellaneous [ZYAU] ETFS S&P/ASX 300 High Yield Plus ETF 9.95% Source: Morningstar Equity Australia Large Blend [AUDS] BetaShares Strong Australian Dollar Hdg 2.06% Alternative Strategies Source: Morningstar

27 InvestSMART Australian ETF Report December Quarter Market Overview Yield Yield is the income earned on an investment and is expressed as a percentage. Historically, Fixed income, Property & Infrastructure securities FIGURE 24: AVERAGE HISTORIC YIELD 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.

28 28 FIGURE 25: TOP 5 YIELDING ETFS ETF Historical Yield Sub Category [HVST] BetaShares Australian Div Harvester (mgd) 11.23% 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% Blend Source: Morningstar

29 InvestSMART Australian ETF Report December Quarter Securities Overview Commodities These securities are designed to provide exposure to the performance of FUM Qtr Flows 3mth Avg. 12mth Avg. various commodities and natural resources. The majority are physically backed, though there is a number of synthetic securities available. Commodity ETF Highlights $729m -$20.8m 3.70% 5.20% We do not hold any Commodity focused ETFs in InvestSMART s Separately Managed Account (SMA) portfolios. Avg. Star Rating 2.0 Avg. Yield 0.00% Avg. MER 0.54%. Spread 0.72% No. Funds 10 Overview While BetaShares Currency Hedged Gold Bullion ETF (QAU) saw net FIGURE 26: COMMODITY ETFS BY GEOGRAPHY 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 Source: ETF Issuers^ 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.

30 30 FIGURE 27: COMMODITY ETFS Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating GLOBAL Agriculture [QAG] BetaShares Agriculture ETF CcyHgd(Synth) $2.25 $ % 1.61% 3.72% 11.90% 0.00% 12.71% Miscellaneous Diversified Commodities [ETPMPM] ETFS Physical PM Basket ETC $ % 0.70% 3.03% 6.56% 0.00% 2.82% Commodities & Precious Metals [QCB] BetaShares Com Basket ETF Ccy Hgd(Synth) $8.12 $ % 1.43% 5.51% 4.15% 0.00% 17.67% Commodities & Precious Metals Gold [GOLD] ETFS Physical Gold ETC $ $ % 0.14% 0.84% 2.70% 0.00% 4.42% Commodities & Precious Metals [QAU] BetaShares Gold Bullion ETF Ccy Hedged $49.21 $ % 0.28% 0.40% 10.67% 0.00% 19.39% Commodities & Precious Metals [ZGOL] ETFS Physical Singapore Gold ETF $ % 0.24% 0.96% 3.14% 0.00% 4.12% Commodities & Precious Metals Oil [OOO] BetaShares Crude Oil ETF Ccy Hgd(Synth) $32.36 $ % 0.25% 15.69% 3.00% 0.00% 17.36% Commodities & Precious Metals Palladium [ETPMPD] ETFS Physical Palladium ETC $1.15 $ % 0.89% 13.27% 44.05% 0.00% 7.66% Commodities & Precious Metals Platinum [ETPMPT] ETFS Physical Platinum ETC $1.16 $ % 0.83% 0.74% 6.05% 0.00% 6.35% Commodities & Precious Metals Silver [ETPMAG] ETFS Physical Silver ETC $ % 0.80% 0.23% 4.33% 0.00% 3.61% Commodities & Precious Metals

31 InvestSMART Australian ETF Report December Quarter Securities Overview Currency These securities are designed to track the performance of the Australian FUM Qtr Flows 3mth Avg. 12mth Avg. dollar relative to various currencies. We do not hold any Currency focussed ETFs in InvestSMART s Separately Currency ETF Highlights $536m -$59.2m 0.66% -1.42% Managed Account (SMA) portfolios. Avg. Star Rating Avg. Yield Avg. MER. Spread No. Funds Overview % 0.67% 0.15% 7 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 FIGURE 28: CURRENCY ETFS BY GEOGRAPHY 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

32 32 FIGURE 29: CURRENCY ETFS Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating 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 $ % 0.12% 1.79% 4.90% 0.00% 15.51% Miscellaneous [POU] BetaShares British Pound ETF $28.95 $ % 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 $ $ % 0.10% 0.36% 7.41% 0.17% 9.93% Miscellaneous [YANK] BetaShares Strong US Dollar Hedge $11.82 $ % 0.15% 0.56% 19.46% 0.00% 17.89% Alternative Strategies [ZUSD] ETFS Physical US Dollar ETF $14.22 $ % 0.15% 0.46% 7.11% 0.00% 14.51% Miscellaneous

33 InvestSMART Australian ETF Report December Quarter Securities Overview Property & Infrastructure These securities are designed to track various Domestic and Global FUM Qtr Flows 3mth Avg. 12mth Avg. Property & Infrastructure indexes. We hold positions in VAP, IFRA & DJRE in InvestSMART s Separately Property & Infrastructure ETF Highlights $2,226m +$140.7m 4.42% 6.69% Managed Account (SMA) portfolios. Avg. Star Rating Avg. Yield Avg. MER. Spread No. Funds Overview % 0.59% 0.33% 9 Domestic focused REITs were the best performing category this quarter with MVA, SLF & VAP all delivering returns in excess of 7% for the 3 FIGURE 30: PROPERTY & INFRASTRUCTURE ETFS BY GEOGRAPHY 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. Source: ETF Issuers Get exposure to property and infrastructure with the InvestSMART Property & Infrastructure Portfolio

34 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 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 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.

35 InvestSMART Australian ETF Report December Quarter FIGURE 32: PROPERTY & INFRASTRUCTURE ETFS Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating AUSTRALIA Property [MVA] VanEck Vectors Australian Property ETF $77.92 $ % 0.16% 7.07% 7.27% 5.47% 5.31% [SLF] SPDR? S&P/ASX 200 Listed Property ETF $ $ % 0.18% 7.77% 5.56% 4.09% 3.60% [VAP] Vanguard Australian Property Secs ETF $1, $ % 0.08% 7.72% 6.61% 2.58% 5.15% Equity Australia Real Estate Equity Australia Real Estate Equity Australia Real Estate GLOBAL Infrastructure [GLIN] AMP Capital Global Infras Secs Unhdg $28.24 $ % 0.70% 0.81% 8.22% 2.07% 5.36% Infrastructure Global Not rated [IFRA] VanEck Vectors FTSE Glbl Infras(Hdg)ETF $64.06 $ % 0.20% 2.09% 14.61% 3.17% 13.63% Infrastructure Global [MICH] Magellan Infrastructure Ccy Hdg ETF $ $ % 0.44% 3.02% 16.35% 2.69% 8.03% Infrastructure Global Not rated [CORE] ETFS Global Core Infrastructure ETF $2.34 $ % N/A 2.28% 0.00% 0.22% 41.39% Equity World Other Property [DJRE] SPDR? Dow Jones Global Real Estate ETF $ $ % 0.13% 3.81% 0.77% 3.45% 10.58% Equity Global Real Estate [RENT] AMP Capital Global Property Secs Unhdg $17.20 $ % 0.82% 5.19% 2.40% 1.46% 5.18% Equity Global Real Estate Not rated

36 36 Securities Overview Fixed Income & Cash These securities are designed to provide investors access to domestic and FUM Qtr Flows 3mth Avg. 12mth Avg. global Fixed Income & Cash securities. We hold positions in AAA, FLOT & IAF in InvestSMART s Separately Fixed Income & Cash ETF Highlights $4,089m +$278.4m 1.07% 2.94% Managed Account (SMA) portfolios. Avg. Star Rating Avg. Yield Avg. MER. Spread No. Funds Overview % 0.26% 0.16% 25 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). FIGURE 33: FIXED INCOME & CASH ETFS BY GEOGRAPHY 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, governmentguaranteed entities, investment-grade corporate issues and securitised assets from around the world. Source: ETF Issuers Reduce volatility with the InvestSMART Hybrid Income Portfolio

37 InvestSMART Australian ETF Report December Quarter FIGURE 34: FIXED INCOME & CASH ETFS PART 1 Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating GLOBAL Corporate [IHCB] ishares Core Global Corp Bd AUDH ETF $85.57 $ % 0.20% 1.28% 5.68% 2.91% 14.23% Bonds Global [IHHY] ishares Global High Yield Bond AUDH ETF $23.62 $ % 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 $ % 0.19% 1.14% 10.16% 3.29% 51.82% Bonds Emerging Market Debt [VCF] Vanguard Intl Credit Secs Idx (Hdg) ETF $ $ % 0.22% 1.13% 5.23% 10.29% 16.83% Diversified Credit [VBND] Vanguard Global Aggregate Bd Hdg ETF $4.55 $ % N/A 0.00% 0.00% 0.37% 47.16% Bonds Global Government [VIF] Vanguard Intl Fxd Intr Idx (Hdg) ETF $ $ % 0.19% 0.83% 2.57% 10.17% 10.66% Bonds Global AUSTRALIA Cash [AAA] BetaShares Aus High Interest Cash ETF $1, $ % 0.02% 0.50% 2.03% 2.01% 17.51% Australian Cash [BILL] ishares Core Cash ETF $ $ % 0.01% 0.42% 0.00% 0.89% 5.56% Australian Cash [ISEC] ishares Enhanced Cash ETF $16.06 $ % 0.01% 0.51% 0.00% 1.06% 8.29% Australian Short Term Fixed Interest [MONY] UBS IQ Cash ETF $1.00 $ % 0.06% 0.26% 0.00% 0.97% 2.83% Australian Cash Corporate [PLUS] VanEck Vectors Australian Corp Bd+ ETF $ $ % 0.23% 1.64% 0.00% 1.85% 18.99% Diversified Credit [RCB] Russell Inv Australian Select CorpBd ETF $ $ % 0.23% 1.04% 4.98% 4.22% 6.11% Bonds Australia

38 38 FIGURE 34: FIXED INCOME & CASH ETFS PART 2 Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating AUSTRALIA Corporate [VACF] Vanguard Australian Corp Fxd Intr ETF $84.07 $ % 0.18% 1.43% 5.03% 2.94% 12.09% Bonds Australia [FLOT] VanEck Vectors Australian Fltng Rt ETF $52.15 $ % 0.06% 0.66% 0.00% 1.44% 28.31% Diversified Credit [QPON] Betashares Aus Bank Sr Fltng Rt Bd ETF $ $ % 0.04% 0.82% 0.00% 1.34% 24.52% Diversified Credit Diversified [IAF] ishares Core Composite Bond ETF $ $ % 0.12% 1.39% 3.47% 2.29% 5.83% Bonds Australia [VAF] Vanguard Australian Fixed Interest ETF $ $ % 0.07% 1.39% 3.50% 2.88% 6.25% Bonds Australia Government [BOND] SPDR? S&P/ASX Australian Bond ETF $28.59 $ % 0.15% 1.99% 4.05% 2.67% 5.64% Bonds Australia [GOVT] SPDR? S&P/ASX Australian Govt Bd ETF $12.87 $ % 0.12% 1.90% 3.68% 2.35% 11.32% Bonds Australia [IGB] ishares Treasury ETF $21.32 $ % 0.19% 1.52% 3.21% 2.65% 11.02% Bonds Australia [ILB] ishares Government Inflation ETF $99.24 $ % 0.35% 2.54% 3.47% 0.94% 5.09% Bonds Inflation Linked [RGB] Russell Inv Australian Government Bd ETF $59.88 $ % 0.29% 1.74% 3.65% 3.14% 2.09% Bonds Australia [RSM] Russell Inv Australian Semi-Govt Bd ETF $60.88 $ % 0.27% 0.95% 2.85% 2.36% 2.09% Bonds Australia [VGB] Vanguard Australian Government Bond ETF $ $ % 0.11% 1.45% 3.20% 2.56% 9.91% Bonds Australia Hybrids [HBRD] BetaShares Active Australian Hybrids Fund (managed fund) $22.06 $ % N/A 0.00% 0.00% 0.47% % Bonds - Australia Not rated

39 InvestSMART Australian ETF Report December Quarter Securities Overview Diversified These securities are designed to provide investors with diversified multi FUM Qtr Flows 3mth Avg. 12mth Avg. sector asset allocation. We do not hold any Diversified ETFs in InvestSMART s Separately Managed Diversified ETF Highlights $23m +$30.9m 0.00% 0.00% Account (SMA) portfolios. Avg. Star Rating Avg. Yield Avg. MER. Spread No. Funds Overview % 0.27% 0.28% 4 Vanguard listed the Australia markets first multisector or diversified ETFs in November. These listed fund of funds follow the same principles FIGURE 35: DIVERSIFIED ETFS BY GEOGRAPHY 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. Source: ETF Issuers

40 40 FIGURE 36: DIVERSIFIED ETFS Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating GLOBAL Balanced [VDBA] Vanguard Diversified Balanced ETF $3.53 $ % N/A 0.00% 0.00% 0.25% 60.89% Multisector Balanced Conservative [VDCO] Vanguard Diversified Conservative ETF $1.00 $ % N/A 0.00% 0.00% 0.37% 54.87% Multisector Moderate High Growth [VDHG] Vanguard Diversified High Growth ETF $14.20 $ % N/A 0.00% 0.00% 0.57% 75.54% Multisector Aggressive Growth [VDGR] Vanguard Diversified Growth ETF $4.55 $ % N/A 0.00% 0.00% 0.48% 77.15% Multisector Growth Save time and invest in a diversified portfolio of ETFs with InvestSMART Suitable for all investors as a total portfolio solution or as the core of an investment plan. Diversified Income Portfolio Core Growth Portfolio A portfolio of ETFs giving investors a mix of multiple asset classes to achieve a sustainable income and capital protection. A portfolio of ETFs giving investors a mix of multiple asset classes to achieve long term, stable capital growth.

41 InvestSMART Australian ETF Report December Quarter Securities Overview Equities This group of securities provides the investor with broad-based as well FUM Qtr Flows 3mth Avg. 12mth Avg. as specific sector exposure across domestic and international equity markets. There are an increasing number of ETFs designed to achieve Equities ETF Highlights $27,954m +$1998.8m 6.71% 13.43% specific rules-based objectives, for example High Yield, Ethical, Value, Momentum. Avg. Star Rating Avg. Yield Avg. MER. Spread No. Funds We hold positions in IAA, IVV, VEQ, VEU, UMAX & IOZ InvestSMART s % 0.52% 0.27% 118 Separately Managed Account (SMA) portfolios. FIGURE 37: EQUITY ETFS BY GEOGRAPHY 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. Source: ETF Issuers

42 42 FIGURE 38: EQUITY ETFS EUROPE Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating EUROPE Equities Broad [ESTX] ETFS EURO STOXX 50? ETF $51.09 $ % 0.19% 0.46% 15.13% 1.15% 27.89% Equity Europe [HEUR] BetaShares WisdomTree Europe ETF- Ccy Hdg $53.62 $ % 0.18% 1.15% 14.10% 1.44% 15.01% Equity Europe [IEU] ishares Europe ETF (AU) $ $ % 0.13% 8.58% 26.20% 2.07% 5.98% Equity Europe [VEQ] Vanguard FTSE Europe Shares ETF $ $ % 0.19% 2.17% 16.94% 2.22% 9.03% Equity Europe Equities Strategy [UBE] UBS IQ MSCI Europe Ethical ETF $10.23 $ % 0.34% 2.35% 16.18% 2.41% 5.75% Equity Europe FIGURE 39: BREAKDOWN EQUITY ETFS EMERGING MARKETS Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating EMERGING MARKETS Equities Broad [IBK] ishares MSCI BRIC ETF (AU) $35.46 $ % 0.70% 8.98% 31.61% 1.31% 7.34% Equity Emerging Markets [IEM] ishares MSCI Emerging Markets ETF (AU) $ $ % 0.16% 7.68% 28.37% 1.63% 7.48% Equity Emerging Markets [VGE] Vanguard FTSE Emerging Markets Shrs ETF $ $ % 0.28% 6.05% 20.88% 1.67% 11.77% Equity Emerging Markets [WEMG] SPDR? S&P Emerging Markets ETF $17.21 $ % 0.27% 7.27% 24.59% 1.29% 20.95% Equity Emerging Markets

43 InvestSMART Australian ETF Report December Quarter FIGURE 40: EQUITY ETFS USA Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating USA Equities Broad [IJH] ishares S&P Mid-Cap ETF $ $ % 0.30% 15.10% 15.24% 1.01% 9.26% Equity North America [IJR] ishares S&P Small-Cap ETF $ $ % 0.51% 17.61% 14.39% 1.02% 6.02% Equity North America [IRU] ishares Russell 2000 ETF (AU) $76.59 $ % 0.50% 15.14% 15.09% 1.06% 5.74% Equity North America [IVV] ishares S&P 500 ETF $2, $ % 0.05% 12.45% 19.48% 1.49% 5.25% Equity North America [NDQ] BetaShares NASDAQ 100 ETF $ $ % 0.11% 7.43% 22.28% 0.41% 11.33% Equity North America [QUS] BetaShares FTSE RAFI US 1000 ETF $39.62 $ % 0.14% 6.73% 6.97% 2.13% 11.89% Equity North America [SPY] SPDR? S&P 500 ETF $19.58 $ % 0.14% 12.45% 19.37% 1.59% 20.38% Equity North America [VTS] Vanguard US Total Market Shares ETF $1, $ % 0.08% 6.15% 11.62% 1.46% 4.46% Equity North America Equities Strategy [GGUS] BetaShares Geared US Eq- Ccy Hdg $14.38 $ % 0.11% 14.07% 45.14% 0.62% 47.54% Equity World - Currency Hedged [IHVV] ishares S&P 500 AUD Hedged ETF $ $ % 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 $ % 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 $ % 0.18% 4.43% 2.25% 6.04% 8.19% Equity North America [BBUS] BetaShares US Eqs Strong Bear H-Ccy Hdg $56.10 $ % 0.20% 14.16% 36.75% 0.00% 19.04% Alternative Strategies

44 44 FIGURE 41: EQUITY ETFS ASIA Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating ASIA Equities Broad [CETF] Market Vectors ChinaAMC A-Share ETF(Syn) [HJPN] BetaShares WisdomTree Japan ETF-Ccy Hdg $9.43 $ % 0.43% 5.92% 20.76% 0.92% 40.99% Equity Greater China $78.12 $ % 0.18% 9.32% 22.81% 2.15% 26.34% Equity Japan [IAA] ishares Asia 50 ETF (AU) $ $ % 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 $ % 0.98% 7.91% 20.13% 3.78% 17.99% Equity World Other [IJP] ishares MSCI Japan ETF (AU) $ $ % 0.24% 14.68% 20.51% 1.08% 10.98% Equity Japan [IKO] ishares MSCI South Korea ETF (AU) $40.59 $ % 0.68% 14.76% 37.11% 2.51% 8.33% Equity World Other [ISG] ishares MSCI Singapore ETF $6.42 $ % 0.71% 11.63% 26.79% 2.99% 7.41% Equity World Other [ITW] ishares MSCI Taiwan ETF $45.24 $ % 1.05% 3.16% 19.26% 2.43% 10.61% Equity World Other [IZZ] ishares China Large-Cap ETF (AU) $92.54 $ % 0.51% 9.17% 22.86% 1.99% 13.71% Equity Greater China [VAE] Vanguard FTSE Asia ex Japan Shrs Idx ETF $52.89 $ % 0.26% 8.90% 28.15% 2.80% 22.03% [PAXX] Platinum Asia (Quoted Managed Hdg) $69.79 $ % N/A 9.09% 0.00% 0.00% 22.27% Equities Strategy Equity Asia Pacific w/o Japan Equity Asia Pacific w/o Japan Not rated [UBJ] UBS IQ MSCI Japan Ethical ETF $4.47 $ % 0.23% 8.77% 14.43% 1.38% 5.12% Equity Japan [UBP] UBS IQ MSCI Asia APEX 50 Ethical ETF $8.91 $ % 0.37% 8.10% 37.15% 0.32% 47.55% Equity Asia Pacific w/o Japan

45 InvestSMART Australian ETF Report December Quarter FIGURE 42: EQUITY ETFS AUSTRALIA PART 1 Security FUM ($m) Qtr Flows ($m) MER Spread 3Mth 12Mth Historical Yield Liquidity Sub Category Star Rating AUSTRALIA Equities Broad [EX20] BetaShares Aus Ex-20 Port Divrs ETF $22.93 $ % 0.17% 8.84% 18.20% 2.09% 25.74% [ILC] ishares S&P/ASX 20 ETF $ $ % 0.08% 6.06% 7.04% 4.93% 4.45% [IOZ] ishares Core S&P/ASX 200 ETF $1, $ % 0.06% 7.59% 11.60% 3.61% 20.01% [ISO] ishares S&P/ASX Small Ordinaries ETF $82.34 $ % 0.31% 13.43% 19.30% 2.01% 8.60% [MVE] VanEck Vectors S&P/ASX MidCap ETF $62.50 $ % 0.17% 11.72% 21.42% 3.61% 8.36% [MVS] VanEck Vectors Small Coms Masters ETF $69.92 $ % 0.18% 10.51% 14.38% 3.10% 4.07% [MVW] VanEck Vectors Australian Equal Wt ETF $ $ % 0.08% 9.46% 15.54% 3.01% 12.65% [QOZ] BetaShares FTSE RAFI Australia 200 ETF $ $ % 0.10% 7.29% 11.27% 3.91% 15.26% [SFY] SPDR? S&P/ASX 50 ETF $ $ % 0.05% 6.36% 9.26% 4.59% 4.93% [SSO] SPDR? S&P/ASX Small Ordinaries ETF $16.46 $ 0.50% 0.15% 13.58% 19.56% 2.46% 5.37% [STW] SPDR? S&P/ASX 200 ETF $3, $ % 0.04% 7.68% 11.70% 4.10% 7.73% [VAS] Vanguard Australian Shares ETF $2, $ % 0.04% 7.68% 11.81% 3.44% 7.31% Blend Blend Blend Equity Australia Mid/ Small Blend Equity Australia Mid/ Small Blend Equity Australia Mid/ Small Blend Blend Blend Blend Equity Australia Mid/ Small Blend Blend Blend [VLC] Vanguard MSCI Australian Large Coms ETF [VSO] Vanguard MSCI Australian Small Coms ETF $81.99 $ % 0.05% 6.30% 7.81% 4.04% 11.40% $ $ % 0.10% 11.89% 17.99% 3.59% 10.26% Blend Equity Australia Mid/ Small Blend