What Australian investors are buying and selling

Key takeaways

Total assets under management across Australian open‑end funds and exchange-traded funds surpassed AUD 1.2 trillion at year‑end 2025, an increase of roughly AUD 135.0 billion from December 2024. While active strategies still account for the larger share of assets, passive funds continued to grow their market presence.
Net flows into open‑end funds and ETFs reached an estimated AUD 10.2 billion in the fourth quarter, bringing total net inflows for 2025 to nearly AUD 60.0 billion.
Passive strategies dominated quarterly flows, attracting around AUD 7.7 billion, compared with AUD 2.5 billion into active products.
AUM growth was significantly stronger in ETFs than in unlisted funds, driven by sustained interest in passively managed ETFs. Passive ETFs comfortably outpaced active ETFs on both net inflows and total assets.
By asset class, equity ETFs led fourth-quarter inflows with AUD 9.0 billion, followed by fixed-income ETFs at AUD 3.5 billion. ETF categories like allocation strategies, capital preservation (mainly cashlike exposures), and real assets each drew approximately AUD 500 million.
Market structure remained stable, with Vanguard retaining the largest ETF market share at over AUD 89.6 billion in AUM, followed by Betashares Capital (AUD 62.6 billion) and BlackRock (AUD 54.8 billion).

Total funds (open-end funds and ETFs)

Asset growth persists as passive investing continues to gain ground

As of the end of the December 2025 quarter, total assets across Australian open‑end funds and ETFs reached AUD 1.2 trillion, reflecting 12.7% growth over the trailing one-year period.

Actively managed strategies continued to account for the majority of the industry, representing 63% of total assets under management at year‑end. Despite this, the relative expansion of passive strategies has remained notably strong, with passive assets continuing to grow at a faster rate than their active counterparts. This trend has been supported by sustained investor demand, with passive products recording positive net flows in 23 of the past 24 quarters, consistently outpacing active fund flows.

Exhibit 1 Quarterly Net Assets: Australian open-end funds and ETFs (AUD Billion)

Source: Morningstar Direct. Data as of Dec. 31, 2025.

Strong net inflows reflect steady investor appetite

During the fourth quarter of 2025, estimated net inflows into Australian open‑end funds and ETFs remained firmly positive, amounting to approximately AUD 10.2 billion for the period. Within this total, active strategies attracted around AUD 2.5 billion, while passive strategies drew a significantly larger AUD 7.7 billion, suggesting continued investor preference for lower‑cost, index‑based products across the local market.

Exhibit 2 Estimated quarterly net flows: Australian open-end funds and ETFs (AUD Billion)

Source: Morningstar Direct. Data as of Dec. 31, 2025.

Exchange-Traded Funds

Another strong quarter cements ETFs as a key growth engine

On the back of strong demand and continued inflows into passive strategies, Australian ETF assets expanded by approximately AUD 16.3 billion over the December 2025 quarter. Net inflows exceeded AUD 9.0 billion in each quarter of 2025, contributing to a total of AUD 38.2 billion in net inflows over the 12 months to December 2025. Passive strategies captured more than 90% of these flows, reinforcing their dominant role in ETF growth throughout the year.

Among ETF issuers, Betashares Capital recorded the strongest quarterly inflows, attracting AUD 4.3 billion, followed by Vanguard Investments with AUD 3.7 billion and BlackRock with AUD 2.1 billion. As of Dec. 31, 2025, Vanguard Australian Shares ETF remained the largest ETF in the market, with AUD 22.6 billion in assets, ahead of the Vanguard MSCI International Shares ETF at AUD 14.2 billion and the iShares S&P 500 ETF at AUD 13.1 billion.

At the asset‑class level, equity ETFs dominated net inflows, contributing AUD 9.0 billion during the fourth quarter, while fixed‑income ETFs garnered AUD 3.5 billion. Although modest in scale, the alternatives category was the only ETF segment to experience net outflows over the October–December 2025 period.

Exhibit 3 Australian ETFs’ Quarterly Net Assets (AUD Billion)