Felicity Walsh

Franklin Templeton has launched two new active ETFs on the ASX, bringing its local active ETF range to nine products and adding to a global trend that has seen inflows into active ETFs double as a proportion of all ETF assets since 2022.

The new active ETFs are the Franklin Global Systematic Equity Fund – Active ETF (FGSE) and the Western Asset Enhanced Income Fund – Active ETF (FEIF). Unlike traditional index ETFs, both strategies aim to deliver consistent alpha while retaining ETF transparency and liquidity.

Active ETFs have topped $1.8 trillion globally, as both retail and institutional investors seek the accessibility, transparency and affordability of the ETF structure.

“Investors today want more choice in the ETF space,” says Felicity Walsh, Managing Director of Franklin Templeton Australia and New Zealand. “Our range of active ETFs are designed to bring together the liquidity and transparency of a listed structure with an active and intelligent approach to portfolio management.”

“We are leveraging the expertise of our investment groups and harnessing the full strength of Franklin Templeton’s global platform, spanning decades of market expertise and deep research capabilities – making all of that available in a format that suits how Australians want to invest today.”

Western Asset Enhanced Income Fund – Active ETF (FEIF)

“FEIF is designed for investors who want to do more with the fixed income portion of their portfolio,” says Anthony Kirkham, co-chief investment officer and head of Asia Pacific Investment Management at Western Asset Management.

“It offers a short-duration, high-quality credit strategy that seeks to generate meaningful income above the cash rate, while actively managing risk across sectors and individual securities. For investors looking for yield without taking on significant interest rate sensitivity, this fund offers a genuinely differentiated option as an active ETF.”

FEIF gives investors access to a diversified portfolio of Australian and global fixed income securities managed by Western Asset Management. The fund targets returns that exceed the Bloomberg AusBond Bank Bill Index by 1.5 to 2 per cent per annum, measured over rolling three-year periods.

The Western Asset Enhanced Income Fund returned 6.12 per cent over one year and 7.54 per cent per annum over three years (after fees) to 30 April 2026, compared with the benchmark’s 3.79 per cent and 4.16 per cent respectively.

The Western Asset Enhanced Income Fund (the managed fund) has Recommended ratings from both Lonsec and Zenith Investment Partners.

Franklin Global Systematic Equity Fund – Active ETF (FGSE)

“FGSE suits investors who want broad global equity exposure and are seeking an approach that goes beyond tracking an index” says Chris Floyd, Portfolio Manager at Franklin Templeton Investment Solutions. “Our systematic process analyses thousands of companies daily across quality, valuation, sentiment and other factors, seeking to identify those with the strongest return potential.

“The result is a style-neutral, diversified portfolio that aims to deliver consistent outperformance over time, one which we think is a compelling proposition for growth investors.”

FGSE offers a quantitatively driven, benchmark-aware exposure to global equities, managed by the Systematic Equity team within Franklin Templeton Investment Solutions (FTIS). The fund aims to outperform the MSCI World ex-Australia Index (after fees) over rolling three-year periods, with a tracking error of 2 to 3 per cent per annum.

Over one year to 30 April 2026 the Franklin Global Systematic Equity Fund returned 15.16 per cent (after fees), and 19 per cent per annum over three years, compared with benchmark returns of 15.06 per cent and 16.52 per cent. The fund has a long track record of outperforming the benchmark having launched in Australia over 20 years ago.

The Franklin Global Systematic Equity Fund (the managed fund) has Recommended ratings from both Lonsec and Zenith Investment Partners.

These two additions join an existing suite of seven active ETFs: the Betashares Western Asset Australian Bond Active ETF (BNDS), the ClearBridge Global Infrastructure Income Fund (Hedged) Active ETF (CIIH), the ClearBridge Global Infrastructure Value Fund Active ETF (CUIV), the ClearBridge Global Infrastructure Value Fund (Hedged) Active ETF (CIVH), the ClearBridge Real Income Fund Active ETF (R3AL), the Franklin Australian Absolute Return Bond Fund Active ETF (FRAR) and the Franklin Global Growth Fund Active ETF (FRGG).

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Industry assets reached an all‑time high of $343.5 billion in February before easing to $329.7 billion by the end of March, reflecting a strong start to the year followed by a sharp equity sell‑off in March. Over the past 12 months, total ETF assets have grown by approximately 36%, highlighting the continued structural shift toward low‑cost, exchange‑traded investment vehicles.

“Global equities remained the dominant allocation over the quarter, capturing nearly half of all ETF flows”, said Chad Troja, Manager, Direct Equities at Lonsec. “Although, the allocation of flows when compared to 12 months ago have visibly shifted away from US-concentrated and hedged strategies toward broader global diversification.”

Allocation towards global equities ($6.90 billion) was followed by Australian equities ($4.15 billion) and Australian bonds ($2.73 billion), as investors balanced growth exposure with defensiveness. Global bond ETFs recorded modest net outflows, marking the weakest asset class for the quarter.

Performance was increasingly polarised. Commodities and energy‑themed ETFs led returns, supported by geopolitical tensions and supply disruptions, while precious metals also performed strongly over the rolling 12 months. In contrast, cybersecurity, crypto‑linked products and speculative growth exposures were among the weakest performers, particularly during the March market drawdown.

Active ETFs continued to expand their footprint, accounting for around 36% of Australia’s 400+ listed ETFs, while passive strategies remained a significant component of new product issuance. Thirteen new exchange-traded products launched during the quarter, with global equity exposures dominating new supply.

The quarter highlighted both the resilience of ETF demand and the speed at which market sentiment can shift. As the product universe continues to expand across active, thematic and income‑oriented strategies, dispersion in returns and flows is becoming more pronounced.

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Curt Jacques

Vanguard has expanded its Australian investment range offering four new investment options in global technology and international high yield, with three new ETFs and one unlisted managed fund.

The new funds are designed to work as simple, low‑cost building blocks for investors seeking global technology and income‑focused allocations in diversified portfolios.

The four products being launched today are:

• Vanguard Global Technology Index ETF (ASX:VTEK).
• Vanguard Global Technology Index (Hedged) ETF (ASX:VTKH), a currency hedged version of VTEK
• Vanguard International Shares High Yield ETF (ASX:VIHY)
• Vanguard International Shares High Yield Fund, a managed fund version of VIHY

The global technology funds will track the FTSE All‑World Technology 300 Capped Net Tax Index, which includes approximately 300 stocks across more than 20 countries. The funds will have exposure to leading technology companies such as NVIDIA, Apple, Microsoft, Taiwan Semiconductor Manufacturing Company (TSMC) and ASML Holding.

The new international high-yield funds will track the FTSE All-World ex Australia High Dividend Yield Net Tax Index, an income-focused index which covers approximately 2,200 stocks globally.

Curt Jacques, Head of Product Offer at Vanguard Australia, said the new funds respond to increasing interest from Australian investors in global technology and income‑oriented strategies.

“Our new global technology funds give investors access to large and mid-cap tech leaders across developed and emerging markets, not just the U.S.

“Meanwhile, our international high yield funds give investors access to a diversified, income‑generating portfolio of international companies that complements Vanguard’s Australian Shares High Yield ETF and fund,” he said.

David Ho, Head of Pacific, FTSE Russell says, “We are proud to deepen our global collaboration with Vanguard through the launch of these new funds, supported by our indices that provide diversified exposure to global technology innovation and resilient international income. We look forward to supporting Vanguard as they continue to expand and evolve their offering for investors worldwide.”

The new funds are offered at these management fees, VTEK 0.23%, VTKH 0.26%, VIHY 0.30% with the managed fund 0.36% per annum.

The ETFs will be available for trading on the ASX from 25 March, while the unlisted fund can be accessed via Vanguard Personal Investor also from 25 March.

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Alex Vynokur

Leading Australian financial services business, Betashares, today announced new industry research showing that a record 73% of Australian financial advisers now utilise ETFs in client portfolios, with that number set to increase to over 80% in the coming year.

The 2025 Betashares/Investment Trends ETF Adviser Report found that record numbers of financial advisers were utilising ETFs in client portfolios, with stronger confidence and growing depth. Financial advisers reported that approximately 25% of new client flows outside super were directed into ETFs over the past year, reflecting growing use of ETFs as core building blocks in advised portfolios. Within managed accounts, advisers allocated 29% of new flows to ETFs, while more than one in four advisers increased ETF allocations.

Announcing the findings, Betashares CEO, Mr Alex Vynokur, said Australian financial advisers continue to adopt ETFs across more parts of their client portfolios, particularly as the universe of investment solutions continues to grow.

“Financial advisers continue to use ETFs across more parts of their client portfolios as the landscape for advice evolves. The inherent attributes of ETFs, diversification, simplicity, transparency and cost effectiveness, allow financial advisers to build stronger client portfolios, while also assisting advisers to improve practice efficiencies,” Mr Vynokur said.

High-net-worth advisers leading ETF sophistication

The report shows that high-net-worth focused advisers remain sophisticated ETF users. This cohort demonstrates significantly greater adoption of factor and smart-beta strategies, reflecting a more sophisticated approach to portfolio construction. This cohort of advisers has also demonstrated use of ETF to deploy new client funds as well as to replace poorly performing or more costly active managers with ETFs within client portfolios.

High-net-worth advisers are also using ETFs to implement more targeted portfolio tilts, including country and factor rotations, while maintaining strong cost discipline and operational efficiency. Their above-average usage of ETFs within managed accounts and bespoke portfolio frameworks highlights the extent to which ETFs have become key tools in meeting the complex needs of high-value clients.

“High-net-worth advisers are among the most sophisticated ETF users in the country. They are deploying ETFs not only for broad market exposure but also for precise allocations that align with the unique objectives of their clients,” Mr Vynokur continued.

ETFs and managed accounts continue strong growth trajectory

The research also highlights the continued expansion of managed accounts for adviser-led portfolio construction, with ETFs playing an increasingly important role within these structures. Advisers allocated close to a third of new client flows within managed accounts to ETFs over the past year.

Industry data also reinforces this momentum. According to IMAP, total managed account assets reached $256.25 billion as at 30 June 2025, reflecting the growing demand for solutions that improve the efficiency of financial advice by delivering institutional-grade investment portfolios.

“Managed accounts are helping financial advisers improve efficiency while delivering high-quality, cost-effective investment solutions to their clients. Increasingly underpinned by ETFs, managed accounts are expanding the range of investment options, enabling advisers to scale their practices, while continuing to provide advice that is aligned with each client’s individual goals and circumstances,” Mr Vynokur said.

Broader ETF range to drive next phase of adviser adoption

Financial advisers have been at the forefront of ETF usage for many years, however, the research suggests an acceleration of adoption of ETFs by financial advisers. Driven by the growing universe of ETFs, as well as interrelated adoption of managed accounts, the findings suggest that ETFs will be adopted by the vast majority of all financial advisers in the coming years.

“We expect over 80% of Australia’s financial adviser community to adopt ETFs in client portfolios in 2026. However, given the trajectory of adoption of ETFs, we predict that nearly all of Australia’s financial adviser community will use the convenient and cost-effective investment vehicle in client portfolios by 2030,” Mr Vynokur concluded.

The 2025 Betashares/Investment Trends ETF Investor and Adviser Report surveyed 1,505 financial advisers and 1,770 ETF investors between June and July 2025.

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Chris Bedingfield

The Quay Global Real Estate Fund (Unhedged) Active ETF (ASX:QGRU) and the Quay Global Real Estate Fund (AUD Hedged) Active ETF (ASX:QGFH) are available for trading on the ASX from Monday 24 November.

Offering investors enhanced access to Quay Global Investors funds via the ASX is a significant milestone in the twelve year history of the highly-rated award-winning Quay Global Investors team lead by Justin Blaess and Chris Bedingfield. Demand for an ASX listed offering speaks to the strength of Quay’s proposition and their commitment to the preservation and creation of wealth through a differentiated approach to managing global real estate equity portfolios.

The new active ETFs provide ASX investors with access to a concentrated, high conviction portfolio of real estate securities listed on exchanges around the world. Unlike the Australian real estate market which primarily offers exposure to the retail, office and residential sectors, global real estate offers a much broader universe including aged care, student housing, data centres and storage facilities.

The objective of the ETFs is to provide investors with a total return (before fees and expenses) of the Australian Consumer Price Index (CPI) plus five per cent per annum measured over five years or more. The portfolio typically holds 20 to 40 securities, with most income derived from leases, rent and other real estate related income.

Gillian Larkin, chair of the Bennelong Funds Management Ltd Board said: “Quay are one of Bennelong’s strongest and fastest-growing investment partners. These two new active ETFs represent an important step in Bennelong’s strategy to enhance investor access to our leading investment solutions.”

Bennelong Funds Management CEO John Burke said: “Share market natives have limited options to build a high conviction index unaware allocation to global property, so making Quay’s popular proposition available via the ASX was a logical step.

“Active ETFs are an increasingly popular investment vehicle, and we are seeing retail investors seeking more sophisticated ETF offerings, which replicate those managed by experienced investment teams such as Quay Global Investors.” said Mr Burke.

Quay principal and portfolio manager Justin Blaess said: “The team is proud to reach this milestone. As specialists in listed real estate securities globally we believe an active exposure to global listed property can be a valuable inclusion in a truly diversified portfolio.”

Quay principal and portfolio manager Chris Bedingfield adds that the market conditions are supportive of global real estate investments.

“As investors we are observing deeply discounted valuations globally and consider them to be markedly disconnected from the sector’s robust fundamentals. As such, discounted valuations provide us with opportunity,” said Mr Bedingfield.

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Jun Bei Liu

Ten Cap has listed its first active ETF, Tcap (ASX: TCAP), on the Australian Securities Exchange (ASX) today. 

Tcap is an Australia only long-short active extension strategy. Its underlying strategy is based on Ten Cap’s long-standing investment offering, Alpha Plus. 

Until now the strategy has only been available to institutional and advised investors, and Ten Cap co-founder and lead portfolio manager, Jun Bei Liu, says the firm wanted to expand the strategy’s availability into the broader retail market.

“This is one of the longest running and most consistently performing long short equity only funds in Australia, and we wanted to provide all types of investors with access to this strategy,” says Ms Liu.

Tcap aims for “equity-like” returns but with less market volatility given the strategy’s ability to hold both long and short positions. It offers clients core exposure to the ASX200 Index but with the additional option of holding up to 10 per cent outside the benchmark in small and mid-cap stocks. It is style agnostic and utilises a proprietary sector-based hedging strategy.

The underlying strategy, the Alpha Plus fund, has returned 12.45 per cent a year since inception, outperforming the ASX200 index by 2.87 per cent. 

Since taking over as manager of the fund in 2019, Ms Liu has delivered a return of 12.9 per cent a year compared to the ASX200 of 9.9 per cent – an annualised (net) outperformance of 298bps.

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Jun Bei Liu

Ten Cap will launch its first active ETF, Tcap (ASX: TCAP), on the Australian Securities Exchange on 24 November.

Tcap’s underlying strategy will be based on the firm’s long-standing investment offering, Alpha Plus, which is one of the longest running and most consistently performing long short equity only funds in Australia. It has been managed by Ten Cap co-founder and lead portfolio manager, Jun Bei Liu, for over six years.

Ms Liu says Tcap will bring a strategy which has until now only been available to institutional and advised investors, to a broader market of retail investors.

“We want all types of investors to gain access to our strategy and benefit from the returns that we have been generating for our existing investors for over two decades.

“The strategy’s defining feature is its ability to perform in both rising and falling markets. Gains can be generated from declining stock prices via short positions, making the fund’s performance less dependent on the overall direction of the market,” she says.

Ten Cap co-founder and CEO, Jason Todd says the launch of an ETF was a natural step for the business.

“This ETF represents a number of firsts for Ten Cap, following the launch of the business earlier this year. We wanted to offer an institutional grade product to a new set of investors and believe that ETFs are a great vehicle in which to do so and the right step for the growth of Ten Cap as a business.

“Demand for active ETFs is increasing as investors look for more cost-effective ways and an easier path to access investment strategies. ETFs are helping to reduce the friction costs of investing and at the same time are providing a broader range of investment products and options to a new generation of investors. We don’t want the Alpha Plus strategy to only be available to institutional and/or high net worth clients.

“The Tcap ETF is best suited for those who seek exposure to a unique and complex strategy that cannot be replicated via passive options, and one that is led by Jun Bei, an exceptional investment manager with a solid track record of delivering return to investors,” says Mr Todd.

Tcap aims for “equity-like” returns but with less market volatility given the strategy’s ability to hold both long and short positions. It offers clients core exposure to the ASX200 Index but with the additional option of holding up to 10 per cent outside the benchmark in small and mid-cap stocks. It is style agnostic and utilises a proprietary sector-based hedging strategy.

The underlying strategy, the Alpha Plus fund, has returned 12.45 per cent a year since inception, outperforming the ASX200 index by 2.87 per cent.

Since taking over as manager of the fund in 2019, Ms Liu has delivered a return of 12.9 per cent a year compared to the ASX200 of 9.9 per cent – an annualised (net) outperformance of 298bps.

Ms Liu adds the current market conditions make it a good time for this launch.

“We believe the cyclical tailwinds for the Australian equity market will continue to push it higher as we start heading into the new year.

“It is unlikely that the bull market is nearing an end, and as “fear of missing” out intensifies we think this could sharply push markets higher which will benefit the performance and returns generated by our ETF,” she says.

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Tamara Stats

BlackRock Australia has announced its intent to launch the iShares Bitcoin ETF (ASX: IBIT), reinforcing its commitment to providing Australian investors with greater choice and easier access to cryptocurrency exposure in the local market.

IBIT is expected to be quoted on the ASX in mid-November 2025.

With a management fee of 0.39%, the fund wraps the US-listed iShares Bitcoin Trust (NASDAQ: IBIT), offering local investors a simple, cost-effective, and regulated way to access bitcoin without the technical and operational complexities of holding the asset directly.

Tamara Stats, Director of Institutional Client Business, BlackRock Australasia, said, “The introduction of IBIT in Australia highlights BlackRock’s ongoing efforts to innovate and reflects the growing interest from institutional investors seeking efficient, convenient access to bitcoin as a potential diversifier within their multi-asset portfolios.”

Steve Ead, Head of Global Product Solutions, BlackRock Australasia, said, “IBIT offers Australian investors a familiar ETF wrapper to access bitcoin, drawing on BlackRock’s global scale and infrastructure. By making IBIT available on the ASX, we’re focused on broadening access and democratising investment opportunities for more Australians.”

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Sam Watkins

PIMCO, a global leader in active fixed income management, has announced the launch of the PIMCO Short Term Active Yield Active ETF (EARN), its fifth active exchange-traded fund (ETF) in Australia. Designed to meet the evolving needs of investors, EARN offers a compelling alternative to traditional cash and term deposits by combining capital preservation, liquidity, and enhanced return potential in a short-duration, actively managed strategy.

The launch of EARN follows the successful introduction of four active fixed income ETFs in February — PGBF, PDFI, PCRD, and PAUS — each designed to offer Australian investors institutional-grade access to global and domestic bond markets. Together, these strategies reflect PIMCO’s commitment to delivering innovative fixed income solutions tailored to local investor needs.

EARN invests in a portfolio of high-quality, investment-grade bonds, and is built for investors seeking a modest shift from traditional savings vehicles, offering attractive monthly income and daily liquidity without compromising on credit quality. Active management is central to the strategy, drawing on PIMCO’s global credit research and macroeconomic insights to navigate short-term fixed income markets.

The launch of EARN responds directly to the evolving needs of Australian investors amid falling cash rates and increasing demand for low-duration, actively managed fixed income strategies. It fills a gap in the Australian ETF market by offering a local fixed interest strategy with a minimum of 50% AUD-denominated bonds, making it highly relevant for domestic investors.

“EARN is designed to provide a compelling alternative to cash and money market funds — helping investors put their money to work while maintaining capital stability and liquidity,” said Sam Watkins, Managing Director and Head of PIMCO Australia and New Zealand. “It complements our existing suite of active fixed income ETFs and, as one of Australia’s biggest fund managers, reflects our commitment to delivering innovative solutions tailored to investors here.”

Positioned as a flexible income solution, EARN offers:

• A yield advantage over traditional cash and term deposits
• Capital preservation through exposure to investment-grade bonds
• Daily liquidity for easy access to funds
• An active edge in short-term fixed income, powered by PIMCO’s global expertise

EARN is suitable for both retail and adviser-led portfolios, offering income with flexibility and the potential for stronger returns relative to traditional cash investments, in exchange for a modest increase in risk.

The fund is available for trading on the Australian Securities Exchange.

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Arian Neiron

New research has revealed ETF adoption among advisers has intensified in the last year, with over 70% reporting greater usage and 65% using two or more smart beta strategies. The depth of usage has also expanded to cover a broader range of asset classes, with Australian equities, global infrastructure, and emerging markets the most popular asset classes among advisers adopting smart beta strategies.

The 2025 VanEck Smart Beta Survey also found more than half of advisers (50.13%) had replaced market cap/passive exposures in client portfolios with smart beta (a 10.77% increase since 2022), and even more advisers (61.27%) had done the same for active funds. Two out of three respondents agreed that smart beta is going to become more prevalent in portfolios and 99% of respondents currently using smart beta ETFs expressed satisfaction.

The survey also revealed that one in four financial advisers invest in crypto as part of their personal portfolio but only 16% are currently invested or considering investing on behalf of clients. Bitcoin remains the most popular digital asset among financial professionals.

On the topic of private markets, 60% of financial advisers currently allocate, with single private market funds and listed vehicles being the most popular way to gain exposure. However, nearly two thirds of respondents are not planning on increasing their allocation to private markets over the next three years.

At least 1 in 2 respondents currently utilise an SMA/Managed Account. Of those currently considering using an SMA or Managed Account, investment track record and credibility were the two most important factors.

Arian Neiron, CEO & Managing Director, VanEck Asia Pacific, said: “One thing is clear from ten years’ worth of survey data: ETFs have become an indispensable tool for advisers targeting cost-efficient outcomes. Penetration is effectively universal at 96.41%. We see smart beta tracking the same arc, with adoption lifting from 36.81% in 2016 to 47.85% in 2025.

“The smart beta switch has been reflected in net flows. In 2023, only two months cleared $500m. Last year, this surged to nine months, with four months crossing the $1 billion threshold for the first time. This year has been softer with the broader markets pullback, however six out of eight months still topped $500m, and July set a new all-time high of $1.1 billion,” said Neiron.

Smart beta ETFs go beyond tracking a market capitalisation index offering investors access to smarter strategies and targeted outcomes, typically for a fraction of the cost of active strategies.

The annual VanEck Australian Smart Beta Survey is the largest survey of its kind in the world, capturing investment trends in the Australian market. This year, marking its 10 year anniversary, the survey attracted 556 responses from financial advisers and brokers working in Australia.

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