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VanEck forecasts ETF market to hit $200bn in 2024

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VanEck expects Australia’s ETF market to grow substantially in 2024.

Australia’s ETF market will reach $200 billion by year end, with $18 billion to $20 billion in net flows, according to VanEck.

These expectations top VanEck’s earlier prediction that the Australian ETF market will reach $180 billion in assets under management (AUM) by the end of 2024.

“This year has further shown the resilience and popularity of ETFs, as well as the decline in actively managed funds,” VanEck Asia-Pacific chief executive officer and managing director Arian Neiron said in December.

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“While the economic turbulence of 2023 is likely to continue into 2024, it’s clear that investors are still seeking opportunities and are confident in the long-term benefits of investing in ETFs.”

In its latest report, the firm said it believes growth will extend even further.

It did, however, flag some changes.

“We are at the point of the curve where we will start to see some increase in de-listings particularly Active ETFs – the thinking of ‘add an ETF to the label’ will sell itself is simply nothing but marketing puffery,” VanEck predicted.

“Investors will be increasing more discerning as to their ETF preferences and exposures, reinforcing the theme of ‘selectivity’. True to label performance, costs and transparent are embedded in investor DNA.”

Furthermore, it highlighted that asset allocation will witness a shift, with alternative exposures gaining significance and a more pronounced emphasis on fixed income, as investors grapple with allocating towards various duration profiles.

Last month, Betashares revealed that the Australian ETF industry grew by 13.1 per cent or $19.6 billion in November, to hit a new all-time high of $169.7 billion.

Betashares attributed the rapid growth to a “triple threat” of large unlisted-to-active ETF conversions, asset value appreciation, and strong net inflows observed during the month.

“At least $10 billion (50 per cent) of the growth this month came from conversions of existing unlisted active funds into active ETFs as several new issuers joined the industry,” said Betashares chief commercial officer Ilan Israelstam.

“Strong asset value appreciation, particularly in global equities exposures, and net inflows contributed the remainder of the growth.”

VanEck forecasts ETF market to hit $200bn in 2024

VanEck expects Australia’s ETF market to grow substantially in 2024.

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Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.

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