‘Rare dip’ for ETFs as Aussie benchmark takes battering

Australia’s exchange traded fund (ETF) market recorded a rare dip in market cap, with strong monthly inflows unable to offset the drop, data from leading ETF trader Betashares reveals.

The total market cap for ETFs declined by 0.8%, or $2.1 billion, between January and February this year, Betashare’s latest market update showed.

Over the same period, the S&P/ASX 200 index fell 3.1%, with concerns around Trump’s tariff policy and a tightening jobs market rattling investors.

The rout has continued for the benchmark index, slipping below 8,000 for the first time in six months.

Australians’ ETF asset holdings now sit at $255.3 billion, just shy of the all-time high set in January this year.

Despite market volatility, industry flows remained positive, with Betashares recording a total of $3.2 billion in ETF industry net flows for the month.

International equities products ($1.5 billion) maintained their strong lead over Australian equities ($722 million) and fixed income ($500 million).

Vanguard Australian Shares Index (VAS), iShares S&P 500 (IVV), and Betashares Global Shares ETF (BGBL) saw the biggest monthly inflows.

Betashares Sustainability Leaders Diversified Bond (Currency Hedged), Magellan’s Global Fund (Open Class) (Managed Fund), and Betashares Legg Mason Real Income Fund (Managed Fund), meanwhile, saw the biggest outflows.

ASX trading value was also 8% higher month on month, sitting at $13 billion for February.

February was the fifth consecutive month where the industry recorded flows above the $3 billion mark, the data showed.

Despite the February hiccup, ETF market cap growth for the year remains well in the black, up 34.8% or $66.0 billion.

Eleven new ETF products were launched in February this year, including Betashares’ own crypto-exposed funds QBTC, a Bitcoin-centred ETF, and the QETH, the first Ethereum ETF on the ASX.