Australian ETF assets reach record high
Australian exchange-traded funds (ETFs) saw approximately $7 billion in new investments during September, pushing total industry assets to an all-time high of $388 billion, Betashares’ latest report reveals.
The $6.9 billion in September inflows marked a modest decline from August’s $7 billion, yet the sector’s assets expanded by 25.5% compared to the same period last year. However, a $1.1 billion drop in market valuations trimmed the net asset growth to $5.9 billion. By month’s end, 508 ETFs were actively traded across the ASX and TMX exchanges, with three additional funds launching during September.
International Investments Dominate
Foreign stock ETFs captured roughly half of September’s total inflows, drawing in $3.2 billion—double the $1.6 billion directed toward domestic equity products. Yet international equity funds did not enjoy uniform success, as five of the ten largest outflows came from this category, including iShares S&P 500 (-$79 million) and Betashares Global Sustainability Leaders (-$37 million).
Among the top-performing funds were Vanguard MSCI Index International Shares ETF (+$520 million), Vanguard Australian Shares Index ETF (+$448 million), and iShares Core S&P/ASX 200 ETF (+$318 million). Meanwhile, index-linked and factor-based strategies continued to dominate investor interest, with nearly $5 billion flowing into index ETFs, $1 billion into smart beta products, and $940 million into actively managed funds.
Market Share Trends
Vanguard, Betashares, and iShares maintained their positions as the industry’s leading providers, controlling 29%, 22%, and 20.5% of the market respectively. Betashares observed that investors were increasingly evaluating the tax efficiency of index-based ETFs following proposed changes to capital gains tax legislation. Additionally, the report highlighted declining Australian housing prices as a key driver behind investor diversification into equities, bonds, and commodities.
Domestic equities experienced a resurgence, securing $1.7 billion, their strongest monthly inflow since June, while fixed-income ETFs attracted an additional $1.3 billion in capital.
Sector Breakdown
International equities accounted for around half of September’s inflows, continuing to attract more investor money than Australian equities, at $3.2 billion compared to $1.6 billion for domestic vehicles. Australian equities nevertheless rebounded, attracting $1.7 billion, their highest monthly inflows since June. Fixed income ETFs attracted a further $1.3 billion, supported by record inflows into Australian bond ETFs as investors sought yields that remain near their highest levels in years.
The Global X Semiconductor ETF, which tracks semiconductor companies, delivered returns for the month, according to Bloomberg and Betashares. With assets now at $388 billion and a 25.5% year-over-year surge, the goal of $400 billion by the end of 2026 is “within reach”.
