Taiwan, APAC’s third-largest ETF market by AUM, is set for continued growth. After active ETFs were approved in late 2024, 2025 saw strong momentum: global managers entered for the first time, domestic managers launched active products, and actively listed ETFs reached 19 by end-2025.10 Despite entry challenges, the mix of trusted local players and scaled global firms is accelerating a more competitive, diversified, and mature market.11 Growth is also supported by retail investors (70%+ of the base), with younger investors favoring broad and thematic ETFs and older investors preferring monthly high-dividend products.12
Key takeaways
- Australia’s ETF market is scaling faster than expected: ETF Assets Under Management (AUM) reached A$324bn in 2025, up 43.2% year-over-year, positioning Australia as a leading contender for APAC’s third-largest ETF market behind China and Japan.
- ETF growth in Australia is increasingly driven by active ETFs and Self-Managed Super Funds (SMSFs): Passive ETFs still dominate in AUM and number of funds, but active ETFs are a rising engine for new fund flows in Australia, while SMSFs are steadily increasing ETF adoption.
- Australia’s regulatory landscape has played a key role in facilitating ETF investments: Australia’s long-standing regulatory innovation, from share classes and dual-access structures to semi-transparent ETFs and the adoption of the Material Portfolio Information (MPI) model, has helped active managers enter and compete in the ETF ecosystem.
- Across APAC, strong contenders are vying for ETF market share: Taiwan has expanded rapidly since active ETF approval (with retail-led demand), South Korea is surging on sector/thematic strength but seeing consolidation pressure, and India is posting impressive long-run growth in the region with commodity and policy-supported demand.
- The competitive landscape across APAC will continue to drive greater market sophistication: Across Australia and Asia, competition will intensify and cross-listings via exchange partnerships or master/feeder structures will likely grow, widening investor access to regional and global exposures.
ETF Overview Down Under
Australia’s ETF market has surpassed forecasts, ending 2025 at a record $324bn (AUD)—up 43.2% year-over-year, with a 10-year compound annual growth rate (CAGR) of 28.7%—and highlighting strong investor demand and momentum broadly reflected across Asia.1
Although Australia’s ETF AUM is far smaller than Japan’s or China’s, regulatory innovation has created a mature ecosystem positioning it to become APAC’s third-largest ETF market amid stiff competition.
This paper assesses Australia’s comparative advantages and the region’s growth drivers, while evaluating how Australia stacks up against Taiwan, South Korea, and India as each market adapts regulatory frameworks to capture a larger share of the expanding ETF sector.
Active ETFs Offer New Avenues for Growth in Australia
Passive ETFs in Australia still reign supreme, constituting the lion’s share of total assets and net new flows.
Yet active ETFs have emerged as an increasingly significant source of Australia’s ETF momentum, taking center stage in the listing floors with the appeal of their specialized and tailored investment strategies. In addition, a number of traditional passive managers either entered the active ETF space in 2025 or added to their existing ranges, demonstrating confidence in the growth potential of active ETFs.
While active ETFs in Australia do face strong competition from established passive managers, the growing diversity of active strategies is a positive development for the ETF landscape – driving greater choice and innovation for investors. Most notably, across APAC, active ETFs in Australia continued to lead the way in 2025, accounting for more than 57% of APAC active ETF AUM.2
Momentum From Self-Managed Super Funds (SMSF)
SMSFs further showcase Australia’s financial innovation and have also played a significant role in driving the growth of its ETF industry.
As detailed in J.P. Morgan’s 2025 Future of Superannuation report,3 Australia ranks 55th in global population, yet its retirement system, currently the world’s fourth largest with $4.3 trillion in assets, is projected to rank second largest by 2031. SMSFs, playing a growing role in Australia’s retirement system, accounted for more than $1 trillion in assets as of June 2025, just under a quarter of total superannuation assets.4 Some 315,000 of the nearly 650,000 total SMSFs now hold at least one ETF, with ETF allocations in SMSFs topping out at a record high of 12%.5 This surge of allocations to ETFs has been most pronounced among newly established SMSFs,6 where allocations continue to grow and the value proposition of ETFs is increasingly recognized.7
While ETFs might not yet be the preferred investment of choice for Australia’s large institutional investors, their growing allocations within the broad distribution channel of SMSFs position Australia’s ETF market for continued expansion.
Regulatory Tailwinds
Australia’s long-standing regulatory innovation, from share classes and dual-access structures to semi-transparent ETFs and the adoption of the Material Portfolio Information (MPI) model, has helped active managers enter and compete in the ETF ecosystem.8
In addition, with retail participation rising, Australia mandated clearer naming from April 2024: ETFs must now carry an “Active” or “Complex” label, improving investor protection and helping platforms, researchers, and advisors classify products for screening and model portfolios.
The ETF Picture Across APAC
Within APAC, competition is heating up between markets. As of the end of 2025, China ($861.2bn USD)9 and Japan ($712.5bn USD) led the way in terms of ETF AUM in the region, but there is a fierce contest for the third spot, with Taiwan, Australia, and South Korea all in close contention, while India also demonstrates immense potential.
South Korea’s manufacturing strength (tech, autos, chips) helped drive a standout 2025 for ETFs tied to these sectors. ETF AUM rose about 75% from $118bn in 2024 to $206bn in 2025, putting South Korea within reach of overtaking Australia and Taiwan.13
Rapid growth has brought consolidation: 2025 saw 253 launches but 157 closures (vs. 89 in 202414), mostly among smaller ETFs unable to match larger, low-fee competitors. Beyond fees, first-mover advantage is strong—South Korea’s first ETF (listed in 2002) has remained the AUM leader for nearly two decades despite a higher total expense ratio than peers.15
South Korean investors are also increasingly using offshore ETFs, supported by tax advantages and access to products restricted or viewed as riskier locally.
India’s ETF market is growing rapidly, and while it has not yet achieved the same AUM as Australia, South Korea, or Taiwan, it has demonstrated impressive progress over the past decade, achieving a 10-year CAGR of 44.5%.16
The market is still concentrated in domestic equities and commodities. Commodity ETFs surged in 2025 on rising gold and silver prices and captured 48% of net new flows.17
Early growth was catalyzed by government action, with the Employees’ Provident Fund Organisation (EPFO) raising its ETF allocation from 5%18 to 15%,19 boosting demand and liquidity. Retail participation has also accelerated.20
Looking Ahead
ETF growth across Australia and Asia remains strong, with further upside likely.
Australia benefits from an innovative, supportive regulatory regime, though market saturation is a risk. Despite rising active listings, the active–passive debate will persist, and new active entrants need long-term plans beyond launch—covering capital markets support, a distribution and sales plan, platform strategies, and operational and Securities Services capabilities.
ETF usage should keep expanding as advisors increasingly allocate to ETFs and digital, data-driven advice scales. Across Asia (Taiwan, South Korea, India), competition will intensify and cross-listings via exchange partnerships or master/feeder structures should grow, widening investor access to regional and global exposures.
Overall, Australia underscores the fact that regulatory foresight, adaptability, and investor-centric design drive sustained ETF success, supporting a more mature and interconnected ETF ecosystem across Asia and beyond.
References
1.
ETFGI Asia Pacific (ex-Japan) ETFs industry insights report, December 2025
2.
PWC ETFs 2030 – Capitalising on disruptive innovation
3.
Future of Superannuation Report, J.P. Morgan, October 28, 2025
4.
Quarterly superannuation performance statistics highlights, APRA, September 2025
5.
New SMSF trustees propel uptake of financial advice, Vanguard, May 28, 2025
6.
Class 2026 Half Year Benchmark Report Finding, Class, Feb. 18, 2026
7.
2025 Annual Benchmark Report, Class, Sept. 2025
8.
Outcomes of review into internal market making for quoted managed funds, ASIC, December 11, 2019
9.
ETFGI Asia Pacific (ex-Japan) ETF and ETF Industry Insights, December 2025
11.
The Current Landscape of Active ETF Issuance in Taiwan: From Innovation to Breakthrough, TWSE, Aug. 20, 2025
13.
ETFGI Asia Pacific (ex-Japan) ETFs industry insights report, December 2025, December 2024.
14.
ETFGI Asia Pacific (ex-Japan) ETFs industry insights report, December 2025
15.
Increasing Demand for Overseas-Listed ETFs in Korea: Causes and Policy Challenges, Korea Capital Market Institute, September 2, 2025
16.
ETFGI Asia Pacific (ex-Japan) ETFs industry insights report, December 2025
17.
Ibid.
18.
Ion’s Sandeep Sabnani and DSP’s Anil Ghelani discuss the rise of ETFs in India, ION, Nov. 11, 2024
19.
IAASGYAN, Exchange Traded Funds
20.
EY JPM APAC Report, October 2024
Disclaimer:
JPMorgan Chase Bank, N.A., organized under the laws of U.S.A. with limited liability, is regulated by the Office of the Comptroller of the Currency in the U.S.A., as well as the regulations of the countries in which it or its affiliates undertake regulated activities. For additional regulatory disclosures regarding J.P. Morgan entities, please consult: www.jpmorgan.com/disclosures. These materials have been prepared exclusively for the internal use of the J.P. Morgan’s clients and prospective client to whom it is addressed (including the clients’ affiliates, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, certain products or services that may be provided by J.P. Morgan. These materials have been provided for discussion purposes only and are incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. These materials may not be disclosed, published, disseminated or used for anyother purpose without the prior written consent of J.P. Morgan. If the recipient of this communication is in Switzerland, the information provided in this document is for information purposes only and does not constitute an offer, a solicitation, or a recommendation, to purchase any financial instruments. Where applicable, the information provided in this document constitutes an advertisement (within the meaning of art. 69 of the Swiss Financial Services Act (“FinSA”)) for the financial services referred to herein. The statements in this presentation are confidential and proprietary to J.P. Morgan and are not intended to be legally binding. In preparing this presentation, J.P. Morgan has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Neither J.P. Morgan nor any of its directors, officers, employees or agents shall incur any responsibility or liability whatsoever to the Company or any other party in respect of the contents of this document or any matters referred to in, or discussed as a result of, this presentation. J.P. Morgan makes no representations as to the legal, regulatory, tax or accounting implications of the matters referred to in this document. J.P. Morgan may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as advisor or lender to such issuer. The products and services described in this document are offered by JPMorgan Chase Bank, N.A. or its affiliates subject to applicable laws and regulations and service terms. Not all products and services are available in all locations. Eligibility for particular products and services will be determined by JPMorgan Chase Bank, N.A. and/or its affiliates.
