Big three extend grip as ETF market hits $364b

Binaya Dahal

Journalist

15 June 2026

Vanguard, Betashares and iShares have strengthened their grip on Australia’s exchange traded fund (ETF) market, collectively capturing more than three-quarters of net inflows in May as industry assets rose to $364 billion.

The trio accounted for 77% of total income, with net inflows exceeding $5 billion for a third consecutive month. According to Betashares’ latest ETF Review, buoyant equity markets and continued enthusiasm for artificial intelligence-related strategies drove the result.

Vanguard led the field with $2.34 billion in inflows, 44% of the total. Betashares attracted $920 million (17%), iShares gathered $848 million (16%), while investors spread the remainder across providers including VanEck, State Street, Pinnacle, Global X and Macquarie Group.

Australian equities were the single largest destination for new money, drawing $2.24 billion, narrowly ahead of international equities at $2.18 billion. Fixed income strategies drew a further $684 million, while listed property and commodities recorded smaller inflows.

The allocation trend coincided with a broad global equity rally, underpinned by stronger-than-expected US corporate earnings and sustained investment in artificial intelligence infrastructure.

Betashares investment strategist Tom Wickenden said earnings momentum and AI-linked capital expenditure were key drivers of market performance.

“Global equity markets extended their rally through May. S&P 500 companies reported 27 per cent year-on-year earnings growth in Q1 2026, more than double consensus, driven by the hyperscaler capex cycle,” he said.

He added that emerging markets outperformed as investors rotated into Asian technology exposure.

“The MSCI EM index rose 9.7 per cent as investors rotated into Asian chip manufacturers as a higher-beta, cheaper alternative to US mega-cap tech. Korea and Taiwan were the principal beneficiaries,” he said.

Domestically, Wickenden said regulatory and tax settings are shaping portfolio construction, with ETFs holding structural advantages in managing capital gains under the revised rules.

“Unlike direct portfolios and managed funds, ETFs can better manage turnover through in-specie creation and redemption, avoiding internal capital gains crystallisation under the revised regime,” he said.