The ETF market in Australia has witnessed impressive growth in 2025, amassing $63 billion since the start of the year, thanks to a combination of investment appreciation and $37 billion in net inflows. Betashares forecasts suggest the industry could reach $320 billion by the end of the year and $500 billion by 2028, surpassing earlier predictions.
Betashares CEO Alex Vynokur highlighted the evolution in investment strategies, noting that Australian investors are increasingly turning to ETFs for building diversified portfolios. Financial advisors favour these instruments due to their accessibility, transparency, and cost-effectiveness. ETFs function like shares on exchanges such as the ASX, offering exposure to diverse assets ranging from stock indexes to commodities.
According to Adrian Neiron, CEO and managing director of VanEck Asia Pacific, Australia's ETF market is experiencing rapid expansion. It required two decades to reach the initial $100 billion, then just three years to double, and a mere 15 months to hit $300 billion. Neiron anticipates a 20 percent compound annual growth rate for the industry over the next five years, potentially exceeding $750 billion by 2030.
In September, a Vanguard ETF focusing on 1,320 of the globe’s largest companies attracted the highest inflows, totalling $257.2 million. Additionally, an iShares ETF tracking the US S&P500 index saw significant activity, drawing $246.4 million in net inflows.
Despite their rapid rise, Betashares underscores that ETFs still comprise only about six percent of the larger managed fund industry in Australia, suggesting there is ample opportunity for further growth and adoption. As investors continue to seek efficient, diversified investment vehicles, the role of ETFs in Australian financial portfolios appears set to expand.
