High demand for equity ETFs tips total 2025 flows over $48b

Yasmine Raso

Senior Journalist, Financial Newswire

6 March 2026

Morningstar’s latest research report recapping the performance of the Australian exchange traded fund (ETF) market in the last quarter of 2025 and across the entire year found the gradual growth in investor appetite for equities has driven total flows upward of $48.3 billion in just 12 months.

Up from $33.3 billion in 2024 and capping off the year with $14.6 billion in flows in the fourth quarter, the new record high comes as equity ETFs captured $9.2 billion in the fourth quarter alone and $31.7 billion across the year – a $5.7 billion increase from the previous period.

Fixed income ETFs followed with $3.6 billion in the final quarter and $11.2 billion over the year to represent a $5.2 billion increase, with commodity ETFs collecting $1.9 billion in total for the year after heightened demand for gold and other precious metals exposure.

According to the research house’s categorisations, investors showed a strong favour for Australian large-blend ($2.1 billion) and world large-blend ETFs ($1.3 billion), as well as a particular interest in North American-tilted products; they poured a further $948 million into US equity ETFs despite global products already producing such heavy exposure to the market.

Morningstar’s report also confirmed that the Australian ETF market capitalisation in terms of assets under management (AUM) remains concentrated among the top three providers – Vanguard, Betashares and iShares by Blackrock – with 65.2 per cent, stealing some market share from Dimensional, State Street, Magellan Group, Hyperion and Talaria Asset Management in the last year.

However, Morningstar indicated that the ranking was largely reversed when focusing on the active ETF space.

“Active ETFs drew unprecedented flows in the fourth quarter of 2025, amassing almost AUD 3 billion in new money. For the full year, active ETF flows reached AUD 7.8 billion— a significant jump from AUD 5 billion in 2024,” the report said.

“Active equity strategies brought in AUD 3.4 billion, a bit lower than AUD 4.0 billion the year before, while active bond strategies saw inflows of AUD 2 billion, a strong increase from AUD 472 million in 2024.

“Assets in active ETFs reached AUD 68.8billion at the end of 2025, rising from AUD 55.5billion in 2024. Equity strategies remain the largest segment, with AUD 48.9billion in assets, representing around 70% of all active ETF holdings.

“Allocation ETFs followed with AUD 7.4billion, accounting for 10.7% of assets, closely trailed by active fixed income ETFs at AUD 6.8billion, or 9.8% of the market.

“Flows into active ETFs accounted for 16.2% of all ETF inflows in Australia in 2025, though active ETF contribution has fluctuated significantly in recent years. Active ETF assets represented 21.6% of total ETF assets at the end of 2025, up from 14.9% in 2024.

“The active segment has grown in step with passive ETFs, with the 2023 spike driven by the launch of ETF structures for some larger existing investment trusts.

“Dimensional Fund Advisors, with the advent of the “dual-access” structure in 2023, is the most dominant player (25.6% market share) in the active ETFs segment. A similar approach by the Magellan Group places it in third position, with 12.3% behind Betashares (17.6%).

“Vanguard secures its position as the fourth-largest provider, with a 10.3% market share, supported by its strong presence in the allocation category.”