Strong Growth Driven by Index ETPs
The Australian exchange-traded products (ETP) market experienced a notable surge in 2025, recording $51.9 billion in net flows, a 60% increase compared to the previous year. This significant growth highlights the ETP market‘s critical role in Australian investment portfolios, with the total market size reaching $279.6 billion. Index ETPs were the primary growth contributors, attracting $41.8 billion in flows. Smart beta products secured $5.3 billion, while active ETPs gathered $4.8 billion, with investments focused on a few strategies.
Core equity funds continued to appeal to investors, with major products such as the Vanguard Australian Shares Index ETF (VAS), Vanguard MSCI Index International Shares ETF (VGS), and Betashares Australia 200 ETP (A200) accounting for 19% of gross inflows. This trend underscores a sustained reliance on diversified building-block solutions.
Fixed income ETPs also gained momentum in 2025. Following the rate-driven cash rotation of 2023, inflows into bond ETPs expanded across the category. This shift indicates a move from tactical allocation to a more structural, long-term investment position.
According to David Gallagher, executive director of research at Rainmaker Information, “The strong preference for simple, diversified and cost-effective products shows how firmly long-term thinking has taken hold in the Australian market.” Cost sensitivity continues to be a dominant theme, as lower-fee products attracted the majority of new investments, reflecting value-conscious portfolio construction.
Rainmaker’s analysis reveals that the ETP market is not only expanding in size but also maturing, with stable inflows across segments. This stability demonstrates increasing investor confidence in the transparency and structure of ETPs. Gallagher noted, “Interestingly, no performance chasing was observed, as flow patterns did not correlate with prior-year returns,” indicating a shift towards strategic, long-term investment.
Rainmaker Information, founded in 1992, is a leading Australian-based research firm providing marketing intelligence, research, and consulting services on the wealth management industry. They gather and generate in-depth marketing intelligence with industry research, data, professional development, and media capabilities, accessible through subscription.
Last updated: 8 April 2026, 3:31 pm
