The Australian exchange-traded fund (ETF) industry now sits at a record $242.9 billion in assets under management (AUM), according to new data from Betashares.
The milestone comes after the ETF industry clocked its second strongest month on record in terms of asset growth, in November, with a total market cap increasing by $10.4 billion or 4.5 per cent.
Notably, net flows in the calendar year to November stood at $26.9 billion, setting a new record well above the $23.3 billion set in 2021.
Betashares highlighted that the local market is now within “striking distance” from $250 billion.
“Industry flows were strong again with $3.1 billion recorded over November, the third all-time highest level for monthly flows on record,” the ETF provider said.
“The last 12 months has seen the industry grow by 36.9 per cent, or $73.2 billion.”
Meanwhile, ASX trading value was slightly higher month on month, reaching some $13.7 billion for November.
Digital asset exposures again performed well, with the Crypto Innovators ETF (CRYP) topping the list with a 42.4 per cent return over the period.
In fact, the top five performing funds of the month were all exposed to cryptocurrency, with CRYP followed by the Global X 21 Shares Ethereum ETF (42 per cent), DigitalX Bitcoin ETF (39.8 per cent), Global X 21Shares Bitcoin ETF (39.8 per cent) and VanEck Bitcoin ETF (39.6 per cent).
In terms of product launches, four new funds launched last month, including Australia’s first ethical Australian fixed income ETF, and three other funds.
Conversely, Magellan closed three active funds from its Core range.
Looking at asset flows, November was a standout month for international equities products with inflows topping $1.7 billion, while Australian equities ($804 million) and fixed income ($565 million) rounded out the top three.
Multi-asset and currency, meanwhile, saw $101.8 million and $61.8 million in new investor dollars.
International equities continue to capture the lion’s share of flows, with recent analysis showing that six out of 10 of the most popular ETFs in Australia were focused on global shares.
The inaugural InvestSMART ETF Scorecard report, released in October, revealed that international ETFs was the most popular ETF category over the 12 months to August 2024.
One likely reason is that investors see the benefits of investing internationally and want exposure to the booming US tech sector, InvestSMART said.
Looking forward, InvestSMART group CEO Ron Hodge said at the time that in the next decade, ETFs will likely become a cornerstone of wealth-building strategies, especially as “skyrocketing property prices” push home ownership further out of reach for younger generations.
“It’s crucial for investors to look beyond short-term gains and focus on long-term performance … This year’s winner could easily be next year’s loser,” Hodge said at the time.
