ETF industry prepares for significant boost in holdings in 2026

Yasmine Raso

Senior Journalist, Financial Newswire

11 December 2025

The Australian exchange traded fund (ETF) industry is preparing for a significant boost in holdings in 2026 mainly driven by existing investors, as new research reveals reinvestment levels are close to returning to highs last seen in 2021.

The 2025 Betashares/Investment Trends ETF Report, based off a survey of 1,505 financial advisers and 1,770 ETF investors, found 81 per cent of existing ETF investors intended to expand their holdings in ETFs over the next 12 months, at the same time as usage has jumped by more than 20 per cent in the past as a result of heightened activity from new and existing investors.

Survey respondents cited diversification, convenience, cost-effectiveness and ‘suitability as a portfolio core’ as the top reasons for adding ETFs to portfolios or increasing their exposure, with the investment vehicle marking a new record of making up 17 per cent of the average investment portfolio.

Betashares chief executive, Alex Vynokur, said the research reflects the “structural shifts” that have emerged from both financial adviser and investor activity in recent years, as ETFs continue to solidify their position in portfolios.

“ETFs are now being used by 2.7 million Australians to build wealth and support their long-term financial goals. More than ever, Australians are turning to ETFs as a foundation for their financial future, attracted by their convenience, cost-effectiveness, and ability to fit seamlessly into a broad range of portfolio strategies,” he said.

“Diversification remains the name of the game in 2026 across asset classes, sectors and regions. It’s encouraging to see more investors recognising the inherent benefits of ETFs, which are fundamentally aligned with the principles of good investing.

“ETFs fit hand-in-glove with regular investing habits, and investors are responding. ETFs in conjunction with investment platforms like Betashares Direct, underpinned by world-class technology, are empowering Australians to stay disciplined and focused on long-term wealth creation.”

The research also echoed previous studies that have confirmed an elevated appetite in ETF investors for international equities (65 per cent) and Australian equities (60 per cent) as their next investment. The survey has also estimated a further 300,000 Australians will invest in ETFs for the first time next year, taking the total number of Australian ETF investors to a record three million. As a result, Betashares has also confirmed its forecast for the Australian ETF assets under management (AUM) to surpass $500 billion by the end of 2028.

“International and Australian equities have traditionally held leadership positions in terms of asset classes for Australian ETF investors. The growing universe of ETFs are giving more investors more options than ever before to add exposures across all major asset classes to their portfolio,” Vynokur said.

“ETFs continue to benefit from a range of structural trends supporting greater adoption as a convenient and cost-effective portfolio solution. The reality is that Australians are turning to ETFs to build wealth as demographic and societal shifts, including an ageing population and declining housing affordability, reshape long term financial planning.

“ETFs are increasingly helping address broader wealth creation questions such as preparing for retirement or enabling younger Australians to build wealth outside of property.”