Active exchange-traded funds (ET) now represent 37 per cent of all ETF listings in Australia and over 15 per cent of total industry assets, according to Trackinsight’s 2025 Global ETF Survey Report, produced with JP Morgan Asset Management (JPMAM) and S&P Dow Jones Indices.
According to JPMAM, these products have enjoyed a compound annual growth rate (CAGR) of approximately 53 per cent in assets under management (AUM) since 2018 – more than double the 27 per cent CAGR recorded among passive ETFs over the same period.
Trackinsight’s predicted active ETF launches would outpace index ETF listings in the Australian market by the next financial year.
“By FY26, Australia will see more new active ETF listings than index-tracking ETFs for the first time,” said Andrew Campion, general manager of investment products and strategy at the ASX, in the report.
Global investor appetite for active ETFs is also on the rise, with most planning to increase their allocations in the near term.
Namely, 69 per cent of global respondents indicated plans to raise their active ETF allocations. Another 23 per cent said they would be making no changes, while just 8 per cent are planning to reduce their investments in active ETFs.
Internationally, there are over 3,300 active ETF products, more than double the total from 2019, the report stated. They now represent 27 per cent of all ETF listings globally, up from 13 per cent six years ago.
The active investment vehicles attracted $352 billion in flows during 2024 – taking up 22 per cent of total flows – and accounted for 51 per cent of all launches worldwide last year, exceeding passive listings for the first time.
“That momentum has only grown, with active making up 60 per cent of launches in early 2025,” Trackinsight said.
“The active ETF space is nearing its next growth wave. Share class reform, more fund conversions and new entrants are reshaping the market. Emerging themes – like private credit and enhanced income strategies – are pushing boundaries on what ETFs can deliver.”
The primary reasons for using active ETFs include the potential for outperformance, lower management fees compared to active mutual funds, risk management and transparency, the report discovered.
Active launches persist despite criticism
Despite the surge in active listings, Campion still expects index ETFs to dominate and attract over 80 per cent of CHESS inflows annually.
Commenting on this trend last month, Stockspot CEO Chris Brycki said: “Most active managers who launch ETFs struggle to attract money. Today there are 50 ETF providers on the ASX, but just 11 of them control 97.5 per cent of the assets. And all but three of those are index-focused.”
According to Brycki, the narrative is clear – the ETF market is dominated by indexed investing and active ETFs are struggling to find an audience.
Speaking to InvestorDaily in April, Marc Jocum, senior product and investment strategist at Global X, explained that fee-conscious Australian investors are increasingly flocking to low-cost index ETFs, leaving active ETFs struggling to gain traction.
“Most active ETFs charge significantly more than index ETFs, and Australian investors are increasingly fee-conscious, with the bulk of ETF flows going into low-fee investments,” Jocum said.
Meanwhile, Arian Neiron, managing director and CEO of VanEck Asia-Pacific, recently said the surge in active ETFs on the ASX was less a response to investor demand and more a “push strategy” by issuers looking to capitalise on the growing popularity and asset flows into index ETFs.
“One could argue that the hard-won reputation of ETFs, in general, has given active ETFs an advantage they haven’t necessarily earned, as the implication is that they would be superior to passive funds,” Neiron told InvestorDaily last month.
