ETFs have firmly established themselves in Australian portfolios. The growing demand for low-cost, diversified exposure to domestic and global markets has fuelled the unfolding ETF wave in 2025. There are now more than 300 ETFs listed on the ASX, with investors attracted to modern instruments promising simplicity, transparent operations, and attractive long-term returns. Here, we discuss the top 10 ETFs that rule over the ASX currently in terms of popularity, performance, and strategic appeal.
Why are ETFs gaining traction in 2025?
Easy access, low fees, and immediate diversification have made ETFs more popular with investors. Unlike conventional managed funds, ETFs trade just like any form of share. Execution can even be done to the real-time level of trades. More investors are turning to the use of ETFs in 2025, just as inflation moderates, interest rates stay on hold, and market volatility remains elusive to predict. This emerging style also remains relevant for thematic and ESG investment vehicles. The more that Australians seek value for their dollar, ETFs that provide exposure to whole indices or global sectors with the lowest management fees will stand above the rest.
ETFs on the ASX attracted record inflows in 2025, highlighting their role in modern portfolios..
What makes an ETF worth investing in?
Several variables come into play before investors associate with an ETF. Among the most important characteristics is the expense ratio-the longer you hold, the more it matters. Many of the best ASX ETFs charge fees of less than 0.20%; some are as low as 0.03%. Liquidity is also an important factor-it helps to keep the spreads tight and allows for smoother exits. In addition, knowing a little about the underlying index of the ETF, past returns, and fund size can give us an idea of its stability and performance. In 2025, investors continue to favour funds that provide broad exposure to major indices, strong historical returns, and a clear investment strategy.
How has the ASX ETF market evolved?
The ETF market on the ASX has grown at a very fast rate over the last 10 years. Fifty to 75 ETFs were trading before 2015. By the middle of the year 2025, the number had already crossed the 300 mark while AUM stood at more than $180 billion. The net inflows just in 2024 into ASX-listed ETFs are $18 billion. The top issuers dominate the market and are offering a wide variety of products across asset classes, regions, and investment themes, including Vanguard, BetaShares, and iShares. This is an emerging realm for thematic ETFs like climate change, AI, and healthcare innovation.
These are the 10 most popular ETFs in 2025
- Vanguard Australian Shares Index ETF (VAS):
It continues to be one of the most widely held listed ETFs in Australia. The ETF tracks the S&P/ASX 300 Index and provides exposure to some of the largest local companies. It charges an annual expense ratio of 0.10%, and as of June 2025, it has amassed assets worth $13.4 billion. Thus, it is widely accepted as a core holding for local equity exposure.
Vanguard Australian Shares Index ETF (VAS)
- BetaShares Australia 200 ETF (A200):
It has a low-fee structure, with a minimal fee of 0.04% per annum. It tracks the ASX 200 Index and earned a return of 8.6% in the 12 months to May 2025. It is especially popular with younger investors aiming for a low-cost Australian equity exposure.
- iShares S&P 500 ETF (IVV):
It brings you international exposure to top U.S. companies. It is one of the cheapest ETFs worldwide with a 0.03% fee. This year alone, until date, it has returned 12.4% with technology and consumer discretionary sectors in the lead.
- Vanguard MSCI Index International Shares ETF (VGS):
VGS offers global diversification, excluding Australian markets. It holds over 1,500 international shares while having a 0.18% fee. VGS’s 10.1% return in 2025 to date positions it as the go-to choice for broad global equity exposure.
Vanguard MSCI INDEX International Shares ETF (VGS)
- BetaShares Global Sustainability Leaders ETF (ETHI):
ETHI has been cherished by socially conscious investors. It excludes fossil fuel, tobacco, and defence companies, focusing instead on climate-conscious and ESG-leading firms. With a fee of 0.59%, it delivered a 9.7% return over the past year.
- SPDR S&P/ASX 200 Fund (STW):
STW remains a classic choice for exposure to Australian blue chips. It charges a low fee of 0.13% and returned 7.8% in FY2025. It remains favoured by investors who choose established companies from a local setting.
SPDR S&P/ASX 200 ETF (STW) Market Share
- VanEck MSCI International Quality ETF (QUAL):
The focus of QUAL is to go after high-quality companies internationally with strong financials. The fund charges 0.40% in fees, and it returned 11.2% in 2025. The top holdings of the fund are Microsoft and Nestlé.
- BetaShares Nasdaq 100 ETF (NDQ):
NDQ tracks the top 100 tech-focused companies listed on the Nasdaq. With an expense ratio of 0.48%, it benefited from strong performance in AI and semiconductor stocks, delivering a 15.3% return in 2025, making it the best-performing ETF of the year.
- Vanguard Diversified High Growth ETF (VDHG):
The idea behind VDHG is long-term growth coming from a mixture of shares, bonds, and property. It charges 0.27% and returned 9.1% in FY2025. This is well-suited for investors looking for a highly diversified, set-and-forget approach.
- iShares Core Composite Bond ETF (IAF):
IAF provides access to Australian government and corporate bonds. Charging 0.15% of fees, have as much as 3.2% return this year. Thus, it remains a go-to for the very conservative investor or income model.
Investors Outlook: Where is the opportunity?
The ETF industry in Australia is anticipated to grow more in the coming years. BetaShares estimates that ASX ETF assets could be close to $220 billion by late 2026. Throughout 2025, equity-heavy ETFs have registered strong flows, especially those in the global tech and ESG domain. NDQ and QUAL take the extreme advantage in performance, while ETHI basks in the rise of ESG mandates. Defensive investors gravitate towards bond ETFs such as IAF, in expectation of interest rate hikes tapering off. Diversification is the name of the game, with more Australians adopting a mixed bag of local, global, and sector-specific ETFs to secure their portfolios from uncertainties.
Also Read: ASX 200 and S&P 500 Hit Record Highs Amid Global Market Rally
ETFs will dominate diversified investing
ETFs are one of the best tools in the construction of diversified portfolios. 2025 sees the Australian investors embrace ETFs for transparency, flexibility, and low fees. Whether it’s domestic equity exposure, global diversification, ethical investing, or income generation, the highest-rated ETFs listed on the ASX offer the right solutions. As markets evolve and investor preferences shift, ETFs are expected to remain at the forefront of strategic investing in Australia.
