ETFs tipped to reach $500bn by 2028

After exceeding $300 billion in funds under management last month, Betashares is forecasting the Australian ETF industry will reach $500 billion by the end of 2028 – two years ahead of its previous prediction.

The domestic ETF industry hit a record high of $309.3 billion in funds under management (FUM) in September, as investor demand and product diversity continue to rise. Over the past five years, ETF assets on ASX have more than quadrupled, rising from $71 billion in 2020, while the number of listed ETFs has nearly doubled from 216 to 400.

Given the accelerating rate of adoption, the ETF provider now forecasts the industry could reach $320 billion by the close of 2025 and potentially climb to $500 billion by the end of 2028.

Commenting on the milestone, Betashares CEO Alex Vynokur, said it is a “clear indicator” of the growing role that ETFs are playing in a broad range of investor portfolios.

“Since crossing the $200 billion mark just over a year ago, the pace of growth has accelerated, reflecting the increasing trust and reliance investors are placing in ETFs as long-term wealth-building tools,” Vynokur said.

According to Betashares’ analysis of ASX and Cboe data, the Australian ETF industry has maintained a strong growth trajectory throughout 2025. Assets under management grew by $63 billion since the start of the year, while net inflows have already reached $37 billion over the same period – surpassing 2024’s record with three months still remaining.

The ETF provider identified strong investor demand across international equities, Australian equities, and fixed income as the primary driver behind this year’s inflows. Investor sentiment, consistent with 2024, continued to be positive towards growth-oriented asset classes.

To the end of September, international and Australian equities remained the most well-supported exposures for ETF investors, attracting $14.9 billion and $9.2 billion, respectively.

Fixed income secured the third position in net flows, attracting $7.9 billion, as investors continue to seek diversification and income opportunities.

Betashares also observed significant uptake of ETFs offering exposure to alternative asset classes, such as gold and cryptocurrencies.

Gold ETFs have drawn $1.3 billion in investments this year, mirroring the record allocation of 2020, a figure that Global X senior product and investment strategist, Marc Jocum, anticipated early last month.

The precious metal has exploded in value this year as investors increasingly view it as both a hedge and a store of value due to easing bond real yields, a declining US dollar, and the Federal Reserve’s recent rate cut pivot.

Meanwhile, cryptocurrencies have now received $410 million in net inflows, with Betashares last week stating it believes FUM for the asset class ticked over the $1 billion mark in September.

With over 400 ETFs now available in Australia, it emphasised that the increasing number of options highlights the asset class’s growing popularity and accessibility, particularly as many fund managers now choose to offer their strategies in this format.

“The Australian ETF industry continues to go from strength to strength as more investors and financial advisers embrace ETFs for their inherent attributes of simple access, transparency and cost-effectiveness,” Vynokur said.

Looking ahead, Betashares highlighted that despite considerable growth, ETF adoption in Australia is still in its nascent stages when compared to the US and Europe.

“ETFs still represent only around 6 per cent of the broader managed funds industry in Australia, highlighting the significant headroom that remains for further adoption,” Vynokur said.