The Australian ETF market’s assets under management (AUM) stood at $241.96 billion at the end of 1Q25, according to new data from Vanguard and ASX.
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.
Moreover, the fund manager highlighted the strong momentum that spurred record ETF flows last year continued over the March quarter, with total inflows into ASX ETFs topping $11 billion – the Australian industry’s second-highest quarterly inflows since the $12.7 billion invested during the September quarter of 2024.
“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 Australia’s managing director, Daniel Shrimski.
Vanguard’s data also revealed that while ASX-listed ETFs investing in international equities again captured the largest share of inflows – $3.90 billion over the March quarter – Australian equities attracted record inflows of $3.15 billion.
This is in contrast to last year when international equities were largely credited for the lion’s share of net flows into ETFs.
Inflows into this segment of the market amounted to more than $15 billion last year, more than double those funnelled into Australian equities.
Vanguard revealed that total inflows into the Australian fixed interest ETF category remained relatively strong, recording inflows of $1.4 billion compared with $1.74 billion of inflows over the three months to 31 December 2024.
Meanwhile, international fixed income ETFs received inflows of $558 million compared with $419 million over the previous quarter.
“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,” Shrimski said.
“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.”
According to him, there are now more than 2.2 million Australians investing in ASX-listed ETFs.
“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,” Shrimski concluded.
