New data from the ASX and Vanguard shows that investor cash inflows into Australian exchange-traded funds (ETFs) have totalled $23.3 billion on a year-to-date basis.
In the September quarter, investors spent more than $12.7 billion buying ASX ETFs compared to $5.38 billion in the June quarter and $5.28 billion in the March quarter.
The data also shows that one particular type of ETF is attracting more investment than any other.
Which type of ASX ETF is the most popular in 2024?
ASX ETFs invested in international shares, particularly those tracking an index, have attracted more than 56% of total inflows this year.
Vanguard said investors were seeking to capitalise on strong growth among US shares, in particular.
In FY24, the S&P 500 Index (SP: .INX) grew by 22.7%, and the Nasdaq Composite Index (NASDAQ: .IXIC) rose by 28.61%.
By comparison, the S&P/ASX 200 Index (ASX: XJO) grew by 7.83% (total returns, including dividends, were 12.1%).
In the September quarter, investors ploughed $7.7 billion into international shares ASX ETFs. This brought the year-to-date total to more than $13 billion.
By comparison, investors spent $2.09 billion on Australian shares ETFs in the September quarter, bringing the year-to-date total to $5.04 billion.
Inflows into Australian fixed-income ETFs accelerated over the third quarter as ASX investors targeted bonds for relatively high income.
Investors spent $1.49 billion on Australian fixed-income ETFs in the September quarter, up from $601 million in the June quarter and $694 million in the March quarter.
Inflows into international fixed-income ETFs totalled $446 million in the September quarter, up from $286 million in the June quarter and $108 million in the March quarter.
Adam DeSanctis, Vanguard's Head of ETF Capital Markets, Asia-Pacific, commented:
The appetite for international equity ETFs by investors is not subsiding and continues to outpace the inflows into Australian equity ETFs and other industry segments.
For Australian ETF investors, who now number over 2.2 million, the best investment strategy over 2024 and beyond is to focus on long-term investment growth while staying diversified across different markets and segments.
Beyond diversification and ease of trading, which are the biggest motivations for investors choosing to use ETFs, a high percentage of investors see ETFs as the quickest and lowest-cost way to access different types of asset classes and offshore markets.
ASX ETF provider Vanguard has a number of popular index-based exchange-traded funds.
They include Vanguard Australian Shares Index ETF (ASX: VAS), which tracks the S&P/ASX 300 Index (ASX: XKO); and the Vanguard US Total Market Shares Index ETF (ASX: VTS), which tracks the CRSP US Total Market Index (NASDAQ: CRSPTM1).
Top 6 asset classes for Australian ETF net cash inflows
| Asset class | September quarter 2024 net inflows |
| International shares | $7,760 million |
| Australian shares | $2,092 million |
| Australian fixed income | $1,491 million |
| Commodities | $325 million |
| International fixed income | $445 million |
| Cash | $156 million |
