State Street anticipates a significant expansion in the Australian Exchange Traded Fund (ETF) market, projecting total assets to reach AU$300 billion by 2025. This growth is expected to be fueled by increasing investor demand for active strategies and digital asset exposure. The investment manager, which services nearly half of all global ETF assets, forecasts net inflows exceeding AU$50 billion, further boosted by the entrance of additional major asset managers into the Australian ETF landscape.
A substantial portion of this anticipated growth is attributed to active ETFs, mirroring trends observed in the United States and Europe where assets under management and inflows have surged throughout 2024. State Street’s Global Head of ETF Solutions, Frank Koudelka, noted the expectation that actively managed ETFs will rebound significantly as global issuers focus more on distribution within the Asia-Pacific (APAC) region.
The Australian ETF market experienced a robust 26% growth in 2024. Across the APAC region, China emerged as the fastest-growing ETF market, reporting an impressive 75% year-on-year growth rate. This broader APAC trend underscores the increasing adoption of ETFs as investment vehicles across the region, positioning Australia for continued expansion in the coming years.
