In March, we hosted our Connect Forum ETF Briefing in Sydney, bringing together key stakeholders from across Australia’s investment ecosystem to explore the changing dynamics of exchange-traded funds (ETFs) and how innovation is reshaping the processes that underpin them. With rapid growth, increasing product complexity, and shifting investor expectations, the ETF landscape is entering a new phase – one that demands not only agility but bold transformation in how ETFs are created, serviced and delivered.
Held at a time when the Australian ETF market has surpassed $250 billion in assets under management – with projections pointing to $500 billion by 2029 – the forum offered a deep dive into what’s driving the expansion, what challenges remain, and how technology and collaboration can unlock the next frontier.
Welcoming a New Era of ETFs
I opened the briefing with reflections on the explosive rise of ETFs in Australia. With nearly 400 products now listed on the ASX and Cboe, the pace of new listings, product diversity, and inflows shows no signs of slowing. Whether through low-cost index funds or newer active and thematic ETFs, investors are increasingly turning to these vehicles for transparency, diversification, and cost efficiency.
But with this growth comes complexity. The ETF ecosystem, long dominated by a handful of players, is seeing an influx of new entrants, both local and international. Product innovation, tighter management fees, and the demand for digital asset-based ETFs are reshaping market expectations. Now, more than ever, operational efficiency in the ETF primary market is becoming a key differentiator.
Research Insights: Navigating the Future of ETFs
Andrew Tomlinson, Calastone’s CMO, led the first session of the afternoon, delivering a global perspective on ETF trends and emerging innovations. Drawing from Calastone’s recent research, he highlighted that ETFs globally are on track to grow from $13 trillion in assets to $25 trillion by 2030. In Australia, active ETFs account for around 40% of the market, nearly double the global average of 24%, highlighting the country’s strong appetite for innovation and choice. Meanwhile, fixed income ETFs are also gaining traction, following global trends that point to a broader diversification beyond equities.
Yet Andrew’s presentation wasn’t just about growth; it was about readiness. He detailed our survey results, conducted across several key global ETF markets, which revealed a strong consensus among issuers, custodians, and authorised participants (APs) that current servicing models are no longer fit for purpose. Challenges cited include fragmented workflows, lack of real-time visibility, manual trade processing, and inflexible legacy systems, particularly in the ETF primary market.
The message was clear: efficiency is no longer a ‘nice to have.’ It’s now central to investor outcomes and product scalability.
Panel Discussion: The Evolving Role of ETFs in Australia
In the panel session, moderated by Calastone’s Edward Glyn, industry leaders from HSBC, Vanguard, Cboe, and Calastone explored how the ETF market in Australia is evolving and what needs to happen next.
Patrick Andriske (Vanguard), Oran D’Arcy (Cboe), Harpreet Ahuja (HSBC), and Paul Elflain (Calastone) discussed how Australia’s retail-led ETF market is unique compared to more institutionally driven markets like the US. They also noted that ETF usage is maturing, moving from long-only index strategies to more active, thematic, and options-based products.
“We’re already seeing growing interest in outcome-oriented ETFs, and buffered strategies will likely take off in the next year,” said Oran. “Just as we’ve seen in the US, we anticipate that Australian investors will begin using ETFs more tactically, not just passively.”
On the operational side, Harpreet emphasised the urgent need to modernise processes across the ETF lifecycle, from order capture and PCF creation to settlement and reporting. “We’re still dealing with tech that wasn’t built for ETFs,” he said. “We need to move to ETF-specific infrastructure if we want to scale.”
Paul added that many global ETF servicing models still rely on legacy technology patched together with manual workarounds, a situation that simply won’t support the double-digit AUM growth most markets are now seeing.
Spotlight on Innovation: Calastone’s ETF Servicing Solution
In the day’s spotlight session, Calastone’s David McGuinness gave attendees a live demonstration of our ETF Servicing platform, which has already gone live in Europe and parts of Asia. Designed to automate and streamline the ETF primary market lifecycle, the platform integrates key players – issuers, APs, custodians, and registries – into a single, cloud-native environment.
The platform enables real-time order monitoring, automated actual cost calculations, integrated trade confirmations, and fully digitised contract notes. It’s built to support modern operating models like actual cash settlements and tokenisation-ready workflows. “This is about giving everyone in the ecosystem, from the issuer to the AP, better visibility and control,” said David. “And ultimately, it’s the investor who benefits through tighter spreads and lower total costs.”
Open Forum and Industry Dialogue
The final session invited attendees to pose questions directly to the speakers. Topics ranged from the future of tokenisation in ETF servicing, to the operational challenges facing first-time ETF issuers, to how Australia’s superannuation flows might better support domestic ETF growth. One recurring theme was the need to reduce reliance on fragmented legacy systems and improve integration between registries and trading platforms.
Looking Ahead: What’s Next for ETFs in Australia?
As the event closed, the mood was optimistic yet pragmatic. Australia’s ETF market has momentum and the infrastructure to support it is now catching up.
The consensus? The next 12 months will see a significant leap in both volume and complexity. Issuers will need to reduce cost-to-serve, enhance investor access, and rethink their operational models to stay competitive. Solutions like ours aim to make that possible.
With robust insights, a strong turnout of industry professionals, and rich conversations that extended long into the networking reception, the Connect Forum ETF Briefing proved to be a timely and valuable checkpoint in Australia’s ETF journey.
