The ASX ETF Boom: Record Growth, Surging Demand, and Key Trends
The Australian Securities Exchange (ASX) added 72 new exchange-traded funds (ETFs) in the past financial year, up from 50 the year before. Total ETF funds under management in Australia reached $350 billion as of May this year.
Key Statistics
ETF trading activity on the ASX surged 26% in the last financial year, outpacing a 22% increase in ordinary share trading over the same period.
- 550,000 Australians aged 18–34 are now invested in ETFs.
Industry Perspectives
Nate Smyth, ETF trader and financial planner, reports spending about $250,000 on ETFs and earning $40,000–$60,000 over several years. He described himself as a buy-to-hold investor, noting that "choosing the right ETF can be challenging, with a risk of unknowingly doubling up on holdings."
Alex Vynokur, CEO of Betashares, stated that there has been a "surge in both ETF creation and uptake, driven by client demand."
Rory Cunningham, ASX senior manager, attributed widespread interest in ETFs to their accessibility, diversification opportunities, and low cost.
Steve Johnson, CIO of Forager Funds, characterized some recently created ETFs (e.g., AI-focused) as "allowing investors to gamble on hot trends." He also noted that "active fund managers may follow the market like passive managers but charge active fees." Regarding recent tax changes, he said he had not seen a significant shift in investor behavior.
Recent Tax Changes
Recent tax changes may encourage ETF investment because net gains and losses are contained within the ETF, potentially offsetting individual stock gains with losses.