ETP market breaks records in 2025

Australian ETP market records $51.9 billion in net flows for 2025, up 60% year-on-year

The Australian exchange‑traded products (ETP) market delivered another year of strong growth in 2025, generating $51.9 billion in positive net flows, a 60% increase on the previous year.

Total market size reached $279.6 billion, reinforcing the sector’s position as a core component of Australian investor portfolios.

Index ETPs remained the primary driver, attracting $41.8 billion in flows, while smart beta products collected $5.3 billion.

Active ETPs recorded $4.8 billion, with flows concentrated among a small number of strategies.

Core equity funds continued to dominate investor demand. The major broad‑market products — Vanguard Australian Shares Index ETF (VAS), Vanguard MSCI Index International Shares ETF (VGS), Betashares Australia 200 ETP (A200), Vanguard Australian Shares High Yield ETF (VHY) and Vanguard Global Aggregate Bond Index (Hedged) ETF (VBND) — together accounted for 19% of gross inflows, reflecting ongoing reliance on diversified building‑block solutions.

A consistent theme across the market was cost sensitivity. Lower‑fee products again attracted the majority of new investment, indicating that value‑conscious portfolio construction continues to shape investor behaviour.

Fixed income ETPs continued to strengthen their role within portfolios in 2025.

Following the rate‑driven cash rotation seen in 2023, inflows into bond ETPs broadened across the category, indicating that demand is shifting from tactical allocation to a more structural, long‑term position.

David Gallagher, executive director of research at Rainmaker Information, said the data highlights a disciplined approach among investors.

“The strong preference for simple, diversified and cost‑effective products shows how firmly long‑term thinking has taken hold in the Australian market,” Gallagher said.

“Investors are prioritising clarity and consistency in their portfolios, and the concentration of flows into established, broad‑market strategies underscores that shift.”

“Interestingly, no performance chasing was observed, with no flow patterns correlated to prior-year returns.”

Rainmaker’s analysis indicates that the ETP market is not only expanding in size but also in maturity, with stable inflows across segments demonstrating increasing investor confidence in the structure and transparency of ETPs.