ETF Leaders Discuss Future Outlook in Panel

The Australian ETF industry is still in its early growth phase, with five leading providers outlining how the market could expand over the next decade.

Growth outlook and market size

When the first exchange‑traded funds launched in 2001, the sector was a niche. A recent ASX poll of industry heads suggests that only about 16 percent of Australian adults hold these products, leaving ample room for new investors.

Gareth Hughes, head of wealth at BlackRock Australia, told the ASX that the range of funds is widening beyond pure equity exposure. He said managers are adding income‑focused, risk‑management and retirement‑oriented options, which could pull more capital into the space.

Active funds, Hughes added, may become a major growth engine because they can help investors handle current market volatility. All executives surveyed agreed that both the total assets and the variety of strategies could rise substantially.

Alex Zaika, Australia CEO of Global X ETFs, projects that total assets could top $1 trillion within five years, up from roughly $360 billion in July 2026. He envisions his firm becoming “the default vehicle for all new investments in Australia.”

VanEck chief executive Arian Neiron expects the number of listed funds to climb past 1,000 in ten years, compared with 457 today. He cautioned, however, that a flood of issuers could create a “long tail of ETFs that never reach viable scale,” possibly leading to de‑listings and consolidation.

Technology, trading and settlement

Technology is set to reshape how investors interact with these products. Hughes highlighted AI‑driven portfolio tools that give users personalized insights, making it easier to match funds with individual goals.

“Technology will also play a more important role. Easier-to-use investment platforms, AI-powered portfolio tools and more personalised insights are helping investors make more informed decisions,” he said.

Neiron added that platforms may move toward near‑all‑day trading, with AI agents gradually replacing human market makers. He noted, “ETF settlement could compress from T+1 (a trade is settled one day after it is made) to T+0 and ultimately to instant.”

He continued, “Once settlement is instant, the trading day loses its meaning. VanEck expects a 23‑hour, always‑on market, with AI agents progressively displacing human market makers on both sides of the ETF price spread.”

Tokenisation, the process of representing assets as digital tokens on a blockchain, is described as the enabler for continuous pricing. “Spreads on international exposures should tighten as 23‑hour continuous trading closes the pricing gaps that currently exist while Australia is open for business,” Neiron said.

For everyday investors, these changes could mean faster access to global markets and less friction when buying or selling. The shift toward instant settlement may also reduce the risk of settlement failures, which historically have been a pain point for smaller traders.

Generational appeal and wealth transfer

Interest is rising among younger Australians, according to Daniel Shrimski, Vanguard’s Asia Pacific managing director. He said, “Vanguard is seeing strong engagement from younger Australians who are increasingly turning to ETFs as a simple and accessible way to begin investing and pursue their long‑term financial goals.”

Shrimski warned that new investors should avoid over‑concentration, noting that today’s winners are not always tomorrow’s. He urged diversification to protect against future market shifts.

Zaika pointed to the looming intergenerational wealth transfer, saying, “Global X expects a larger portion of inherited wealth to be invested via ETFs.”

Betashares’ Alex Vynokur echoed the sentiment, stating, “While ETFs are often associated with younger Australians building wealth, Betashares expects them to play an increasingly important role in helping Australians generate income and manage their investments through retirement.”

In practice, the broader appeal could translate into more balanced retirement portfolios, as families blend inherited assets with low‑cost, diversified funds. If younger savers adopt these tools early, they may build steadier streams of income for later years, reducing reliance on higher‑fee products.

Overall, the leaders’ comments suggest a future where the Australian exchange‑traded fund market becomes both larger and more varied, driven by technology, active strategies and a new wave of investors across age groups.