Australian ETF AUM surges through $200b

Assets under management within exchange traded funds (ETFs) has broken through the $200 billion barrier, according to the latest analysis from Vanguard.

What is more, the analysis confirms continuing investor attraction to index-hugging and an increasing appetite for international equity products.

Data released by the Australian Securities Exchange (ASX) and Vanguard showed that Australian ETF assets rose by around $25 billion from the start of January to the end of June, with total ETF investor cash inflows on the ASX of $10.67 billion.

It said the 15% increae in assets under management to $200 billion compared with total ETF assets on the ASX and the Cboe Australia exchange of around $178 billion at the start of 2024.

Inflows into ASX-listed international equity ETFs totalled $5.28 billion (49% of inflows), while Australian equity ETFs attracted $2.95 billion of investor capital over the half. This represented 27% of total ETF inflows.

Commenting on the data, Vanguard Head of ETF Capital Markets, Asia-Pacific, Adam DeSanctis said 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 U.S. share markets and other offshore markets.

“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 (VAS), which invests in the top 300 stocks on the ASX, attracted $573 million of inflows over the first half and remained the biggest ASX-listed ETF with more than $15.3 billion of assets under management.

It said another key theme over the first half of 2024 was the surge in listings of active ETF and managed fund products. Out of 41 new ASX ETF listings in total, 28 of them (68%) were actively managed funds.

“The number of new funds listing on the ASX has been accelerating, and most of these have been niche investment products underpinned by complex trading strategies, sometimes through the use of debt and synthetic financial instruments.” DeSanctis said.

“What’s clear is that the ETFs industry is continuing to evolve, which is why the Australian Securities and Investments Commission (ASIC) has just introduced new ETF product labelling guidelines to reduce confusion and assist investors in understanding the risks associated with different types of ETF products.”