A sharp slowdown in the country’s real estate market has sent investors rushing towards Australian-listed exchange-traded funds, with a record $6.8 billion poured into index tracking products last month alone.
And the biggest beneficiary appears to be income funds – including high dividend-paying products and bond strategies – which received more than a quarter of those inflows, according to Global X, a major ETF provider.
The move has been spurred on partly by changes to tax concessions introduced by the Albanese government in May which have made putting money into real estate less lucrative and sent investors scrambling for new sources of income. At the same time, three interest rate increases this year have made high-growth investment strategies more risky.
VanEck, another major ETF provider, says it expects its assets to top $500 billion as early as next year as interest grows among new types of clients.
“We’re getting small institutions, private banks and even family offices inquiring more and more,” said Arian Neiron, the firm’s head of Asia-Pacific. “We’re seeing it particularly with family offices and high-net-worth investors because they’re questioning venture capital and private equity.”
In particular, the government’s 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 an outsized surge in a single stock will be offset by laggards elsewhere in the fund, potentially reducing the tax bill.
“Investors aren’t waiting for the government’s recent tax changes to take effect in July 2027, they’re adapting now,” said Global X investment strategist Marc Jocum. “This activity is happening against the backdrop of a property market that is starting to lose momentum.”
Source: https://www.afr.com/markets/equity-markets/etf-flows-hit-record-6-8b-as-investors-turn-away-from-property-20260813-p60nxk