Investors maintain strong inflows into ASX ETFs in Q1 2025 despite increased market volatility

Daniel Shrimski

Key highlights:

• Total inflows into ASX ETFs over the March quarter top $11.0 billion, the Australian industry’s second-highest quarterly inflows since the record $12.7 billion invested into ASX ETFs during the September quarter of 2024.
• Australian equities ETFs booked record inflows as many investors increased their exposure to the top ASX companies. The Vanguard Australian Shares Index ETF (VAS) remained the largest ASX-listed ETF, with $1.04 billion of investor inflows and assets under management of $18.17 billion.
• Vanguard expanded its diversified ETFs range in March with the launch of the Vanguard Diversified All Growth Index ETF (VDAL) and the Vanguard Diversified Income ETF (VDIF).

Australian investors added over $11.0 billion into ASX-listed ETFs over the first quarter of 2025, continuing the strong momentum that spurred record ETF investment inflows in 2024.

Vanguard attracted $3.5 billion of cash inflows during the quarter – once again the highest of all other ETF managers – consolidating its place as Australia’s largest ETFs assets manager.

Data released by the Australian Securities Exchange (ASX) and Vanguard today shows that while ASX-listed ETFs investing in international equities once again captured the largest share of inflows ($3.90 billion over the March quarter), ETFs investing in Australian equities attracted record inflows of $3.15 billion from the start of January to the end of March.

Australia’s largest ETF, the Vanguard Australian Shares Index ETF (VAS) with $18.17 billion in assets under management, attracted more than $1 billion of investors inflows over the quarter.

Australian ETF investor numbers continue to grow

“While global financial markets are currently experiencing heightened volatility, the Australian ETFs industry is continuing to see ongoing growth in the number of investors wanting to use exchange traded funds in their portfolios,” said Vanguard Investments Australia Managing Director, Daniel Shrimski.

“History shows that it’s time in the market, not trying to time markets, and broad diversification across sectors, asset classes, and markets that create a steadier path for investors to achieve long-term financial success.

“There are now more than 2.2 million Australians investing in ETFs via the ASX, and that number is increasing from month to month as investors at all levels recognise the benefits of being able to invest in low-cost products that provide broad, diversified investment exposures through a single market trade,” Mr. Shrimski said.

“Industry research shows that a growing number of younger investors are adopting ETFs alongside high-net-worth investors, self-managed super fund trustees and financial advisers. In fact, more than 70% of Australian advisers are now using diversified ETFs as a core offering to their clients.

“Portfolio diversification and the ability to gain exposure to specific asset classes, including overseas markets, remain the primary drivers for individual investors and advisers alike.”

Vanguard announced the expansion of its diversified ETFs range in March with the launch of the Vanguard Diversified All Growth Index ETF (VDAL) and the Vanguard Diversified Income ETF (VDIF).

The Australian ETFs industry had $241.86 billion in total assets under management (AUM) at the end of March, according to the latest ASX data. While this was lower than the record high AUM of $250 billion at the end of January due to recent market declines, total assets under management at 31 March were still more than $50 billion higher than at the same time last year.

Bond ETF inflows remain strong

After record investment inflows into bond ETFs in 2024, total inflows into the fixed interest ETF category remained strong over the March quarter from the levels recorded in Q4 2024.

Australian fixed interest ETFs recorded inflows of $1.40 billion compared with $1.74 billion of inflows over the three months to 31 December 2024, while international fixed income ETFs received inflows of $558 million compared with $419 million over the previous quarter.