In its own iteration of ETF performance data, Vanguard said on Monday investors channelled $17 billion into international equity ETFs during 2024, boosting the size of the local ETF industry by 38 per cent to $239.1 billion.
Vanguard reported record inflows of $33.49 billion into ASX-listed ETFs in 2024, with the firm itself attracting a record $9.5 billion, solidifying its market leadership.
“2024 was a stellar year for the Australian ETFs industry, reflecting both the ongoing growth of this market segment in general terms and the strong returns from global investment markets over 2024,” said Adam DeSanctis, Vanguard’s head of ETF Capital Markets, Asia-Pacific.
DeSanctis explained that despite the proliferation of new active ETF products, low-cost index products, which hold over 80 per cent of the Australian industry’s assets, continued to capture most investor inflows.
Some of the other key highlights included the dominance of international equity ETFs, primarily index-tracking funds, which recorded around half of the ETF industry’s total inflows last year.
According to the fund manager’s data, international equity ETFs saw the strongest demand in the third quarter of 2024, attracting $7.7 billion in inflows.
“It’s very clear that more Australian investors than ever before are using ETFs to access offshore markets,” said DeSanctis.
Vanguard’s own MSCI Index International Shares ETF (VGS) attracted close to $2 billion in investor cash flows last year, which helped to lift its total assets under management to almost $10 billion.
Meanwhile, Australian equity ETFs attracted $7.8 billion in inflows in 2024, reflecting continued investor confidence in domestic market exposure amid stronger demand for international equity ETFs.
The Vanguard Australian Shares Index ETF (VAS), which invests in the top 300 companies on the ASX, remained Australia’s largest ETF after its assets under management increased by more than $3 billion over the course of 2024 to $17.8 billion.
Over 2024, Australian fixed income ETFs attracted $4.4 billion in investor inflows, while international fixed income ETFs recorded additional inflows of $1.2 billion.
“What’s most important for all ETF investors to remember is that the strong market returns from the past few years are not an indicator of future performance, which is why having a long-term focus and diversification across different investment markets and asset classes is imperative,” said DeSanctis.
Last week Vanguard’s peer VanEck reported that the local ETF industry’s market capitalisation has reached a new high of $247 billion, following growth of 38 per cent in 2024 and inflows of $35 billion.
Unlike Vanguard, VanEck tracks both ASX and Cboe listed ETFs.
