Australian ETFs Register Impressive Growth in September

The Australian Exchange Traded Fund (ETF) industry continues to scale new heights reaching a record $226 billion in funds under management for September. This was up 3% from August 2024 and up 48% from September 2023, according to the VanEck ETF Industry Pulse September 2024.

International equity was the stand out, making up more than half the net flows in September.  Australian equity had a muted month, with the largest market cap passive ETF seeing uncharacteristic outflow.

Fixed income experienced a wide dispersion of flows as investors sold out of short duration floating rate note strategies to longer maturity Australian government bond strategies or the broader benchmark, VanEck said.

Even data from Global X, a New York-based provider of ETFs that facilitates access to investment opportunities across the global markets, said that Australia’s ETF industry assets grew nearly 50% over the past 12 months helped by robust flows into global equities-focused passive strategies.

ETF Assets Up

According to a report in Financial Times, total assets across Australia’s 394 ETF products rose to a new all-time high of $152.4 billion as of September-end, up 48.6% from $101.77 billion at the same time last year.

Market movements accounted for $20.73 billion of this figure, while net flows into such strategies were at $17.38 billion. The conversion of numerous unlisted active funds into ETFs also added $11.37 billion to the sector, the report said citing figures from Global X.

Strong growth has been helped by record inflows over the past year, with monthly ETF sales breaching $2.01 billion in July and August before dropping slightly to $1.2 billion in September, according to Betashares data.

Australian ETFs pulled in $15.58 billion in net flows in the year to September-end, putting the industry on the trajectory to surpass the record whole-year net flows of $15.78 billion set in 2021, according to data from Vanguard and the Australian Securities Exchange, Financial Times said in its report.

Investors poured in over $8.49 billion from July to September, more than double the amount they allocated to these products during the first two quarters of the year, at $3.53 billion and $3.6 billion respectively, Vanguard said in a report.

Vanguard noted that ASX-listed global equities ETFs, particularly passive vehicles, accounted for over 56% of total inflows this year as Australian investors hoped to cash in on the boom in the US stock market and, to a lesser extent, other offshore markets.

During the September quarter, global equities ETFs attracted $5.15 billion in net flows, bringing the total amount invested in this segment to $8.69 billion during the first nine months of the year.

Australian equities ETFs registered $1.34 billion in net flows during the three months to September, while Australian fixed income strategies had $1 billion and global fixed income products took in $298.21 million, the report showed.

In line with the industry’s continued growth, Australian ETF assets are on pace to hit $670 billion by 2030, with artificial intelligence and fixed income among the top draws for investors, Global X said last month.