A new report from ASX ETF provider Global X has shed light on the record breaking year for ETFs in 2025.
The report highlights that this investment class is becoming an increasingly attractive asset option for investors.
Image source: Getty Images
Key takeaways
According to the Global X report, the Australian ETF market grew 34.1% in 2025 and is running at a five-year compound annual growth rate (CAGR) of 28.3%.
This growth was driven by over $53 billion in net inflows over the past year, positive market movements, and unlisted funds converting into active ETFs.
Investors poured $5.3 billion in Australian ETFs in the final month of the year, capping off a record breaking 2025 with net inflows totalling $53.3 billion to close out the year, shattering the prior record of $31 billion set in 2024.
But it wasn't just the total investment that broke records.
For the first time since 2019, 92% of Australian-listed ETFs delivered positive returns.
These milestones highlight how ETFs have firmly established themselves as mainstream investment vehicles for Australian investors, offering transparency, liquidity and cost efficiency.
With ETF penetration in Australia still well below international markets, we believe adoption has further room to grow as investors increasingly use ETFs as core portfolio building blocks across asset classes and investment styles.
The report also noted that most Australian ETF investors opt for unhedged currency funds for their global exposure.
Historically, only 10-15% of global equity ETF allocations have been directed to currency-hedging strategies.
However, according to Global X, in 2025, that share rose. Roughly one in every five dollars flowing into currency-hedged exposures, reflecting a heightened focus on managing currency risk.
December at a glance
The report highlighted that December 2025 was dominated by a powerful surge across precious metals.
This capped off a year where commodities emerged as the standout investment theme of 2025.
Gold, silver, platinum and palladium all rallied sharply in the final month, supported by tight supply conditions, resilient central bank demand and growing expectations of easier monetary policy in 2026.
What were the most popular categories in 2025?
The report also shed light on the most heavily sought after sectors in 2025.
Equity ETFs dominated inflows, capturing about two-thirds of total ETF flows in 2025.
Of the $35 billion allocated to equity ETFs, $7.3 billion went into broad-based global equity ETFs, making them the most popular category as investors sought low-cost, diversified exposure.
Broad-based Australian equity ETFs ranked second, after leading flows in 2024.
Defensive assets were also significant, with $14 billion allocated to fixed income ETFs. Global diversified fixed income ETFs had a particularly strong December, boosted by a large model portfolio rotation, contributing to $2.1 billion in inflows for the year.
Liquid alternatives regained momentum, with commodity ETFs attracting over $2 billion in net inflows. Their share of total flows was the highest since 2020, reflecting renewed interest in diversification, inflation hedging, and real assets.
How to target these sectors?
For investors looking for exposure to these sectors, there are plenty of ASX ETFs to consider.
Amongst thematic ASX ETFs, Global X identified the following as the fastest growing:
- Global X China Tech Etf (ASX: DRGN)
- Global X Ai Infrastructure ETF (ASX: AINF)
- Global X Gold Bullion (Currency Hedged) ETF (ASX:GHLD).
For global equities, popular ASX ETFs to consider include:
- Vanguard MSCI Index International Shares ETF (ASX: VGS)
- iShares S&P 500 ETF (ASX: IVV)
- VanEck MSCI International Quality ETF (ASX:QUAL)
For broad-based Australian Shares:
