Intermediaries help ETF flows spike 97% in H1
Greater ETF adoption by financial advisers is among factors helping net flows into Australian ETFs to rise by 97 per cent in the first half of 2025 to reach $21.3 billion.
In its latest monthly flows report, the ETF player said the flows in the six-month period were up from $10.8 billion in the first half of 2024.
It noted there has been increased use of the products by financial advisers as well as them being held in model portfolios.
Marc Jocum, senior product and investment strategist at Global X, said anecdotal evidence demonstrates at least two-thirds of ETF flows are coming from intermediary clients such as financial advisers and brokers.
“In Australia, ETFs still represent only about 6–7 per cent of the total managed funds market, so there’s considerable room for growth as more advisers and investors shift away from traditional unlisted managed funds into low-cost, tax-efficient and liquid ETFs.”
He said he believed the spike had been caused by the adoption of ETFs in model portfolios, product innovation and broader investment options being available.
"[This reflects] continued product innovation and broader investment options becoming available for investors, growing adoption of ETFs in model portfolios, rising engagement from the direct-to-retail channel, and the enduring appeal Australians have with low-cost, transparent, and easy-to-use investment solutions like ETFs."
Investor demand for specific products was concentrated in global and Australian equity ETFs, while interest in fixed income ETFs “continues to build”, it said. Australian equity ETFs saw YTD flows of $3.9 billion, while global ones saw $3.1 billion and diversified global fixed income gained $890 million.
Largest ETFs flows by sector
Source: Global X, July 2025
On the other hand, active global equity ETF saw outflows of $96 million and global fixed income -US Treasuries saw outflows of $87 million, potentially due to concerns on the back of US government actions and how this is affecting US bond yields.
Looking ahead into the second half of the year, Global X said ETF flows activity is typically higher in the latter part of the year which could mean the industry is on track to reach as much as $50 billion by the end of the year.
“ETF growth is expected to continue, driven by the ongoing shift from high-cost funds to low-cost strategies, greater adviser adoption as ETFs become integral to portfolio construction, expanding product innovation, and the rapid rise of digital platforms that make investing easier and more accessible for all types of investors. Together, these factors set the stage for sustained ETF market expansion for many years to come.”
This could also include greater usage of crypto ETFs as it becomes accepted as an alternative asset class, with the sector seeing flows of $253 million since the start of the year. Australian investors are viewing crypto ETFs as a simplified way to get access to the asset class. Global X described these strategies as a way for investors to gain diversification or hedge against fiat currency.
Research by CoreData earlier this year found one in five financial advisers said they would invest in a bitcoin ETF but only 11 per cent hold them on their approved product list.
Global X said: “We continue to see strong and growing interest from investors and advisers as crypto becomes more widely accepted as an alternative asset class. Looking ahead, we expect increased demand for innovative ways to gain exposure, whether through ETFs tracking a broader range of digital assets or through more sophisticated or dynamic structures that incorporate features like staking, derivatives, or multi-asset strategies.”
AUTHOR
Laura Dew
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