ETF assets hit $388bn as inflows near $7bn

Australia's exchange-traded fund (ETF) industry attracted $6.9 billion in net inflows during September, taking total assets under management to a record $388 billion as investors continue to favour index-based strategies, international equities and fixed income.

According to Betashares' September 2026 ETF Review, industry assets increased by $5.9 billion over the month despite negative market movements of $1.1 billion. The market now comprises 508 ETFs, with the industry on track to surpass $400 billion in assets before the end of the year.

International equities led inflows with $3.2 billion, accounting for almost half of September's total. Australian equities rebounded to $1.7 billion, their strongest monthly intake since June, while fixed income attracted $1.3 billion as investors sought yields through bond ETFs.

Betashares said index and factor strategies continued to drive industry growth, with investors increasingly considering the tax efficiency of index-based investments following proposed changes to capital gains tax rules. Falling Australian house prices were also prompting some investors to consider listed alternatives across shares, bonds and commodities.

Betashares investment strategist Tom Wickenden said the current IPO pipeline differs from previous listing cycles, with a small number of companies accounting for a significant share of capital being raised.

"While there have been periods of higher IPO activity, such as in 2021, the current wave is unique in how concentrated the raises are in a small number of companies," Wickenden said.

"We are watching investor demand and how markets absorb this supply. These listings draw on investor capital, and their entry into public markets could reshape market indices in the years to come."

Separate data from Global X ETFs shows the industry attracted a record $21 billion in net inflows during the September quarter, surpassing the previous quarterly high of $16 billion recorded in the September quarter of 2025. Global X senior ETF strategist Marc Jocum said the result reflected ETFs becoming a core component of Australian portfolios, with calendar-year inflows reaching $50 billion by the end of September.

Australian fixed-income ETFs attracted a record $1 billion in September as investors sought to capitalise on elevated bond yields. Jocum said investors were increasingly combining bonds, covered call strategies and infrastructure to diversify income sources, with infrastructure ETFs attracting more than $1.2 billion during the quarter and gold ETFs recording $682 million in inflows.

"Investors are increasingly combining bonds, covered call strategies and infrastructure rather than relying on dividends from a small group of Australian companies," Jocum said.

"Covered call ETFs can generate additional income from equity exposures while helping to moderate volatility, while infrastructure can provide access to essential assets with potentially defensive and income-producing characteristics."

The reports come as Dimensional Fund Advisors announced its Australian ETF business had surpassed $1 billion in assets across six ASX-listed funds, less than three years after launching its first local ETF.

Dimensional Australia chief executive Bhanu Singh said the milestone reflected growing confidence in the firm's investment approach.

"We've spent decades applying financial science to real-world portfolios, and our ETF offering gives financial professionals another way to access that approach, combining broad diversification and low costs with flexible implementation," Singh said.