Australian ETF Industry hits $200B milestone, expected to grow to $500b by 2030
Alex Vynokur
Leading Australian financial services company, Betashares, has announced the Australian ETF industry passed $200 billion in funds under management during June 2024, based on Betashares analysis of ASX and CBOE data.
The Australian ETF industry has grown by $57.8 billion over the last 12 months, with net inflows reaching $11 billion since the start of the year. In stark contrast, Morningstar data shows that unlisted funds have seen estimated net outflows of $3.8 billion over the first half of 2024. [1]
Further, there has been a distinct shift in sentiment this year from 2023, with International and Australian equities returning to their place as the preferred asset classes for ETF investors, receiving $5.6 billion and $3.3 billion of net inflows respectively. After receiving the most interest last year, fixed income rounds out the top three with $1.8 billion in net inflows.
Since the inception of the ETF industry in November 2001, the industry has seen a Compound Annual Growth Rate of 43% p.a.
Given the increasing rate of adoption of ETFs by investors and their financial advisers, Betashares believes the industry could hit $220 billion by the end of the year and increase to $500 billion by the end of 2030.
“The Australian ETF industry continues to expand as the growing range of ETFs is allowing investors and their financial advisers to use the convenient and cost-effective investment vehicle across more parts of their portfolio, while the shift away from typically higher cost unlisted funds to ETFs is helping to reduce costs across investor portfolios,” Betashares CEO, Mr Vynokur said.
“Despite a very strong period of growth for the Australian ETF industry, exchange traded funds still only account for approximately 4 per cent of the managed funds industry in Australia – a figure that is low compared to many other international markets. Over the coming five years and beyond, we expect investor adoption of ETFs to accelerate further.
“There has been a shift so far since the end of 2023 as investors and their financial advisers return to International and Australian equities as market sentiment improves. We expect this trend to continue to drive flows into these two asset classes, alongside fixed income. Moreover, the increasing adoption of retail investment platforms like Betashares Direct, are helping to democratise access to robust wealth creation solutions,” Mr Vynokur concluded.
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