A wave of new exchange-traded funds are flooding the sharemarket as firms jump on the soaring demand from retail investors looking for a cheap and tax-effective way to access some of Australia’s top fund managers.
For the 2026 financial year, 72 new ETFs hit the boards, which was the highest on record and a jump from 50 in the prior year. There are now 458 exchange-traded products on the local bourse and the ASX said it expected that figure to hit 500 over the next 12 months.
Australia’s ETF market attracted more than $50 billion of inflows last financial year, which is expected to balloon as investors prepare for the government’s upcoming changes to capital gains tax.
The replacement of the 50 per cent discount with an indexation model has made ETFs more attractive because they net gains and losses internally.
That means any outsized surge in a single share price would be offset by laggards elsewhere in the fund.
“As housing affordability becomes more challenging and the Australian population ages, ETFs are increasingly being used to help Australians meet their financial aspirations, from building wealth outside property to preparing for retirement,” said BetaShares chief executive Alex Vynokur.
“These structural trends provide a powerful tailwind.”
The surge in listings is being supported by strong uptake from younger Australians, with nearly one in five Gen Z investors – those born between 1997 and 2012 – now investing in ETFs.
That is fuelling a frenzy of ETF trading activity, which jumped 26 per cent in FY26 compared to the prior year, outpacing the 22 per cent growth in overall equity market activity over the same period.
Retail investors have been enticed by the evolution of ETFs from passive or index-tracking funds to actively managed strategies that are overseen by high-profile fund managers with proven track records.
Star Australian hedge fund managers such as Jun Bei Liu’s Ten Cap, Doug Tynan’s GCQ Funds and Patrick Hodgens’ Firetrail have also listed their strategies as ETFs over the past year.
They were joined by other high-profile long-only funds including Ziller’s Global Fund, Loftus Peak’s Global Disruption Fund, Antipodes’ Global SMID Fund and Spheria’s Australian Smaller Companies Fund.
“We are seeing strong momentum in the Australian ETF market, with an expanding range of products providing investors with greater choice and flexibility,” said ASX senior manager of investment products, Rory Cunningham.
“This record year for ETF listings reflects both growing investor demand and the continued confidence of issuers in ASX and the ETF structure.”
From rockets to robotics
ETF providers are also rushing to list international and thematic funds as retail investors chase the huge returns offered by Wall Street’s booming technology sector.
In early May, BetaShares launched a rocket ETF on the local bourse to capitalise on the enormous demand for Elon Musk’s SpaceX. Rival Global X rushed to list its own version just a day before the rocket company’s market debut.
It adds to the numerous ETFs that focus on a particular investment theme from humanoid robotics to silver miners.
“It’s been a record year for thematic ETF investing driven by the energy transition and AI, so the way Aussie investors are allocating is changing,” said Global X senior investment strategist Marc Jocum.
“Historically, investors sought outperformance through active managers, but that is slowly changing as investors are now seeking outperformance through exposure selection instead – the past was ‘who’ to back, now it’s ‘what’ to back.”
The ASX said it was reducing listing fees for ETFs, while rival providers are locked in a battle to provide the lowest management fees.
Global X this week cut the management fee on its Australia 300 ETF to 0.03 per cent a year, a decision that coincided with record demand for the local stocks. Broad-based Australian equity ETFs attracted $1.4 billion in net inflows in May, which was the strongest month on record for the category.
“It’s a natural time to reassess portfolio allocations, review investment costs and ensure core exposures continue to align with long-term objectives,” Jocum said.
“As ETFs increasingly become the preferred vehicle for core portfolio exposure, keeping investment costs low can make a meaningful difference.”