Australia’s sharemarket is experiencing a significant surge in new exchange-traded funds (ETFs), with 72 new products hitting the boards in the 2026 financial year – a record high, up from 50 in the prior year. This influx has brought the total number of exchange-traded products on the local bourse to 458, with the ASX anticipating this figure will surpass 500 over the next 12 months. The Australian ETF market attracted over $50 billion in inflows last financial year, a trend expected to escalate further due to upcoming government changes to capital gains tax.
The impending replacement of the 50 per cent discount with an indexation model is making ETFs more attractive to investors, as these funds net gains and losses internally. This structure means any substantial increase in a single share price within an ETF can be offset by underperforming assets elsewhere in the fund. Alex Vynokur, chief executive of ETF provider BetaShares, highlighted the broader societal impact, stating, “As housing affordability becomes more challenging and the Australian population ages, ETFs are increasingly being used to help Australians meet their financial aspirations, from building wealth outside property to preparing for retirement. These structural trends provide a powerful tailwind.”
Supporting this boom is strong uptake from younger Australians, with nearly one in five Gen Z investors now allocating capital to ETFs. This demographic shift is fuelling a frenzy of ETF trading activity, which jumped 26 per cent in FY26 compared to the previous year, outperforming the 22 per cent growth in overall equity market activity. Retail investors are increasingly drawn to the evolution of ETFs from traditional passive or index-tracking funds to actively managed strategies overseen by prominent fund managers. High-profile Australian hedge fund managers, including Jun Bei Liu’s Ten Cap and Doug Tynan’s GCQ Funds, have listed their strategies as ETFs over the past year. Rory Cunningham, ASX senior manager of investment products, commented, “This record year for ETF listings reflects both growing investor demand and the continued confidence of issuers in ASX and the ETF structure.”
ETF providers are also capitalising on demand for international and thematic funds, driven by investors seeking exposure to booming sectors like Wall Street’s technology giants. For instance, BetaShares launched a rocket-focused ETF in early May, swiftly followed by rival Global X, another prominent ETF provider, listing its own version. The ASX is actively reducing listing fees for ETFs, while providers engage in fierce competition to offer the lowest management fees. Global X recently cut the management fee on its Australia 300 ETF to 0.03 per cent annually, coinciding with record demand for local stocks, as broad-based Australian equity ETFs garnered $1.4 billion in net inflows in May alone, marking the strongest month ever for this category.
