Aussie ETF assets break through $200bn mark

Strong inflows from international equity exchange-traded funds (ETFs) have helped accelerate Australian ETF assets under management (AUM) to above $200 billion.

Data released by the ASX and Vanguard has seen the Australian ETF industry’s AUM surpass the $200 billion mark as at 30 June 2024. In comparison, the year commenced with $178 billion in total Australian ETF assets on the ASX and Cboe Australia.

Assets enjoyed a $25 billion growth, representing a 15 per cent surge, over the first half of the year thanks to solid gains on global equity markets and strong investor inflows.

Total ETF investor cash inflows on the ASX hit $10.67 billion for the six-month period. ASX-listed international equity ETFs accounted for nearly half (49 per cent) of total inflows at $5.28 billion.

Meanwhile, Australian equity ETFs brought in $2.95 billion of investor capital over the half, representing 27 per cent of total inflows.

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The last quarter was largely consistent with overall momentum, Vanguard noted. Investors added $5.38 billion to ASX-listed ETFs over the June quarter, following total inflows of $5.28 billion during the March quarter.

“The strong inflows into international equity ETFs evident over the March quarter accelerated during the June quarter, reflecting the eagerness of many Australian investors to capture the robust growth that has occurred on US share markets and other offshore markets,” commented Adam DeSanctis, Vanguard head of ETF capital markets for Asia-Pacific.

“At the same time the investor inflows into Australian equity ETFs remained resilient, reflecting the positive performance of the broader domestic share market over the first half of the year.”

The Vanguard Australian Shares Index ETF, the largest ASX-listed ETF with more than $15.3 billion in AUM, attracted $573 million of inflows over the first half of 2024.

The surge in listings of active ETFs and managed fund products was another key trend of the six-month period, DeSanctis observed. Some 28 of the total 41 new ASX ETFs were actively managed funds.

Fixed income inflows see stabilisation

Over the half-year, fixed income ETF inflows were at $1.69 billion. This was a slight decrease compared to the fixed income inflows of $1.74 billion during the first half of 2023.

Australian fixed income ETFs enjoyed inflows of $1.29 billion, while international fixed income ETFs saw inflows of $394 million.

DeSanctis added: “Vanguard’s global expectations for higher bond returns over the longer term have not changed, which aligns with our view that central bank interest rates are likely to remain elevated over the medium term.

“So, we expect ongoing interest in fixed income from investors seeking to tap into those higher rates via ETFs that primarily invest in investment grade government bond issues.”