Australian ETF industry closes in on $400bn

Australia's exchange traded fund (ETF) industry is on track to surpass $400 billion in assets under management (AUM) after delivering a record first half of 2026.

The growth was fuelled by surging investor inflows and continued demand for passive investment strategies.

The sector ended June with $372 billion in AUM, up 12.6% or $41.6 billion over the six months, according to Betashares' Australian ETF Review. The growth was driven by $30 billion in net inflows, matching the total amount invested into Australian ETFs during all of 2024, alongside $11.6 billion in market appreciation.

Betashares investment strategist of Tom Wickenden said the results reflected sustained investor confidence despite an uneven global market backdrop.

"Global equity markets rallied through the first half of 2026, powered by evidence that AI capital expenditure is starting to convert into profit," Wickenden said.

International equity ETFs remained investors' preferred destination, attracting $13.7 billion in inflows during the half, followed by Australian equities with a record $8.8 billion and fixed income ETFs with $4.7 billion.

Passive investing continued to dominate the market, with traditional index ETFs receiving $22.8 billion in inflows, while smart beta products attracted $4.7 billion. Active ETFs gathered $2.4 billion despite a wave of new product launches.

The report found investor interest remained firmly focused on technology and artificial intelligence themes, with semiconductor related ETFs among the strongest performers.

"Markets have rewarded fundamentals, not just sentiment, over the past six months," Wickenden said.

The ETF market also continued to broaden, with the number of listed products increasing from 462 to 496 over the period, while trading activity reached $125 billion.

Vanguard remained the largest recipient of investor funds, attracting $10.7 billion in net inflows, ahead of Betashares with $7.2 billion and iShares with $4.8 billion.

Betashares said the industry's rapid growth has positioned it to reach another milestone in the coming months.

"The Australian ETF industry ended the financial year on another record high, reaching $372 billion in total assets under management after recording strong growth for the half year. As a result, $400 billion is firmly in sight for the industry just a month after passing $350 billion in assets," the report said.