ETF investors flock to international share Exchange Traded Funds: Global X ETFs report
Global equity Exchange Traded Funds (ETFs) were the star performers in 2024 drawing over $16 billion in net flows, accounting for over half flows into ETFs, up from 23% in 2023, according to a new report from Global X ETFs Australia, the Australian ETF Landscape H2 2024.
US equities led the way, attracting a record $5 billion in net flows, doubling the previous high set in 2021, and a trend which could continue in 2025. “Investors were keen to get exposure to the US market, especially after US equities experienced their best two-year run in a quarter of a century,” said Marc Jocum, Global X Senior Product and Investment Strategist.
“This momentum could extend into 2025, driven by US exceptionalism and the prospect of stronger earnings growth broadening across sectors beyond technology companies under a pro-markets Trump presidency,” Jocum said. Overall, the ETF market grew 38.7% in 2024 to strike a record $246.4 billion across 401 products, driven by a record $31 billion in net inflows.
“The Australian ETF market welcomed 65 new ETF products, breaking the previous record of 55 in 2023, highlighting innovation in the product offering. While most new products were active ETFs, there was notable rise in thematic and smart-beta strategies launches, such as artificial intelligence (AI) ETFs and growth at a reasonable price (GARP),” said Jocum.
The Global X 21Shares Bitcoin ETF (CBOE: EBTC) was the top-performing ETF in 2024, with flows rising 146% for the year. In 2024, over $330 million flowed into Australian crypto ETFs, representing 1% of total ETF flows, while US crypto ETFs saw over US$40 billion in ETF flows, representing 3% to 4% of total ETF flows.
“Cryptocurrencies thrived in a risk-on environment fuelled by Trump’s election victory and his crypto-friendly policies. ETFs have made crypto investing more accessible, particularly for people reluctant to invest through crypto exchanges.
“Looking ahead, we expect significant innovation in the crypto ETF space over the next one to two years. With the US leading the charge, boosted by Trump’s pro-crypto stance, we could see a wave of new crypto ETFs in 2025, with Australia, being an early pioneer in crypto ETFs, potentially playing a key role,” Jocum said.
“Other key themes include powering the AI revolution. It demands renewable energy to be an important source to power its growth, with nuclear and copper playing critical roles, driving investment opportunities across sustainable infrastructure and supporting AI’s expanding global footprint,” Jocum said.
Investors are also paying closer attention to market valuations. While equity prices have been elevated in the US, investors have recently adopted a more cautious approach to balancing growth potential amidst concerns about potentially slowing economic growth, stagflation and geopolitical volatility. “Having said that, the recent dip in the prices of US technology stocks may prompt some investors to buy on the dip as valuations come down to more affordable levels,” Jocum said.
“Global X experienced strong demand for our international equity and US ETFs and strong demand for portfolio essentials such as gold, which has benefited significantly since Trump’s election.
“For example, our gold suite has seen record year to date (YTD) flows of $130 million, as the precious yellow metal reached all-time highs. We have also seen inflows to start the year for the Global X FANG+ ETF (ASX: FANG) as investors still flock to US share markets attracted by companies such as Nvidia, Alphabet and Meta, which have made big strides over the past year.”
However, while the Australian ETF market is growing rapidly, it accounts for just 1% of the global ETF market. “ETF adoption in Australia is still in its early stages, and the industry has significant potential for growth. Global X Australia’s AUM has surpassed $10 billion this year and we expect it manage at least $11 billion by the year’s end as we see influx of flows into our ETFs. We’re planning to launch between eight and 10 products this year, with a similar number launched in recent years.”
Global X ETFs boasts multiple offices around the country including Sydney, Melbourne and Brisbane, while the business has 13 offices globally, managing almost US$100 billion in AUM. Global X’s parent company Mirae Asset is the second largest asset managers in South Korea, with a long history in the Australian market across ETFs, property, infrastructure, venture capital, and actively managed funds.
