Despite some headwinds, Q1 2026 was a quarter with strong inflows for the Indo-Pacific ETF industry.
In more detail, the global financial markets were shaped by a sharp shift in macroeconomic narratives, driven primarily by geopolitical tensions, energy price volatility, and an increasingly fragmented monetary policy landscape over the course of Q1 2026.
Bond markets reflected a transition from the synchronized easing expectations of late 2025 to a more uncertain environment. In March rising oil prices, linked to renewed geopolitical tensions in the Middle East, pushed inflation expectations higher and challenged the disinflation trend. Within this environment, central bank policies were back as a focus for investors.
Looking more closely, Q1 2026 marked a clear divergence among major institutions. The Federal Reserve maintained a cautious “wait-and-see” stance, holding rates steady as it balanced moderating inflation against geopolitical risks and energy-driven price pressures. Similarly, the European Central Bank kept rates unchanged, signalling flexibility but refraining from further easing amid rising inflation linked to energy costs. The Bank of England also paused, with policymakers highlighting the inflationary impact of the energy shock and even reopening the discussion around potential tightening.
In contrast, the Bank of Japan stood out by maintaining a tightening bias after its earlier policy shift, reflecting stronger domestic inflation dynamics and a gradual exit from ultra-loose policy.
At the same time, structurally higher yields continued to attract investors back into fixed income as an asset class, with bonds regaining their role as a source of income and diversification.
Equity markets experienced notable sector rotation rather than a uniform trend over the course of Q1 2026. Energy stocks outperformed amid the surge in oil prices, while rate-sensitive sectors such as technology came under pressure as expectations for rapid monetary easing were pushed back. This rotation reflected a broader repricing of inflation and interest rate trajectories, as well as persistent uncertainty about global growth. Nevertheless, the overall trend in corporate earnings during Q1 2026 can be characterised as solid but uneven growth, with a clear divergence across sectors and regions, and increasing sensitivity to macroeconomic and geopolitical conditions. At an aggregate level, measured by the S&P 500 companies, earnings growth remained resilient, as companies are expected to deliver low double-digit year-on-year earnings growth. This indicates that, despite macro uncertainty, corporate profitability continued to expand and exceeded (partly) earlier expectations.
Overall, Q1 2026 was characterized by a move from policy synchronisation to divergence, from disinflation optimism to renewed inflation uncertainty, and from broad-based equity gains to more selective market leadership. These dynamics underline a more complex investment environment in which geopolitical developments and central bank policies remain central to investor confidence and market direction.
Assets Under Management by Asset Type
From an Indo-Pacific ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to decreasing assets under management (from $2,428.3 bn as of December 31, 2025, to $2,366.1 bn at the end of March 2026). At a closer look, the decrease in assets under management of $62.2 bn for Q1 2026 was driven by the performance of the underlying markets (-$142.5 bn), while estimated net inflows added (+$80.2 bn) to the assets under management.
That said, the high estimated net flows are despite the decline of the assets under management (AUM) in the Indo-Pacific ETF industry, the best proof of success for the Indo-Pacific ETF industry since their inception.
Graph 1: Assets Under Management in the Indo-Pacific ETF Industry, January 1, 1999 – March 31, 2026 (USD billions)
Source: LSEG Lipper
As for the overall structure of the Indo-Pacific ETF industry, it was not surprising equity ETFs ($1,860.8 bn) held the majority of assets, followed by bond ETFs ($279.5 bn), commodities ETFs ($96.6 bn), money market ETFs ($53.4 bn), alternatives ETFs ($43.7 bn), “other” ETFs ($19.3 bn), and mixed-assets ETFs ($12.9 bn).
Within the current market environment, it is surprising that the assets under management for alternatives ETFs, commodities ETFs, mixed-assets ETFs, and money market ETFs marked a month end all-time high at the end of March 2026.
Graph 2: Market Share, Assets Under Management in the Indo-Pacific ETF Industry by Asset Type, March 31, 2026
Source: LSEG Lipper
ETF Flows by Asset Type
The Indo-Pacific ETF industry enjoyed the highest quarterly inflows on record (+$80.2 bn) over the course of Q1 2026 despite geopolitical and economic headwinds. That said, this flow pattern is somewhat aligned with the flow pattern in other regions, as ETFs showed globally very strong inflows over January and February 2026.
Graph 3: Estimated Net Sales, January 1, 1998 – March 31, 2026 (USD Billions)
Source: LSEG Lipper
These impressive estimated net flows might be seen as proof that the acceptance and adoption of ETFs by Indo-Pacific investors further increased over the course of Q1 2026.
The inflows in the Indo-Pacific ETF industry for 2026 were driven by equity ETFs (+$57.0 bn), followed by alternatives ETFs (+$9.0 bn), commodities ETFs (+$8.6 bn), mixed-assets ETFs (+$3.1 bn), bond ETFs (+$1.7 bn), and money market ETFs (+$1.2 bn). On the other side of the table, “other” ETFs were the only asset type posting outflows (-$0.5 bn) for Q1 2026.
Graph 4: Estimated Net Sales by Asset Type, January 1 – March 31, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was a surprise to see high estimated net inflows into ETFs led by equity ETFs over the course of Q1 2026 since equity ETFs took the largest hit with regard to decline in assets under management. Opposite to other regions, alternatives, commodities, and mixed-assets witnessed higher inflows than bonds. This shows that the investor preferences in different regions around the globe can lead to different flow patterns.
Assets Under Management by Lipper Global Classifications
In order to examine the Indo-Pacific ETF industry in further detail, a review of the Lipper Indo-Pacific classifications will lead to more insights on the structure and concentration of assets within the Indo-Pacific ETF industry. At the end of Q1 2026, the Indo-Pacific ETF market was split into 162 different peer groups. The highest assets under management at the end of the quarter were held by ETFs classified as Equity Japan ($662.9 bn), followed by Equity China ($214.6 bn), Equity Sector Information Technology ($177.7 bn), Equity Taiwan ($133.6 bn), and Commodities Precious Metals ($93.2 bn). These five peer groups accounted for 54.18% of the overall assets under management in the Indo-Pacific ETF industry, while the 10-top classifications by assets under management accounted for 69.98%.
Overall, 21 of the 162 peer groups each accounted for more than 1% of assets under management. In total, these 21 peer groups accounted for $2,027.9 bn, or 85.71%, of the overall assets under management.
Graph 5: Ten Largest Lipper Global Classifications by Assets Under Management, March 31, 2026 (USD Billions)
Source: LSEG Lipper
The peer groups on the other side of the table showed some funds in the Indo-Pacific ETF market are quite low in assets and their constituents may face the risk of being closed in the near future. They are obviously lacking investor interest and might, therefore, not be profitable for their respective fund promoters.
Graph 6: Ten Smallest Lipper Indo-Pacific Classifications by Assets Under Management, March 31, 2026 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper global classifications accounted for $65.6 bn. In line with the overall sales trend for Q1 2026, equity peer groups (+$51.2 bn) gathered the majority of flows by asset type on the table of the 10 best-selling classifications by estimated net inflows for the year. That said, it is surprising that there are no bond classifications on the table of the 10 best-selling Lipper classifications. More generally, it can be said that the table of the 10 best-selling classifications in the Indo-Pacific region features different classifications than those for the other regions. This shows that investor preferences around the world differ, even as most of the trends in capital markets are usually a global phenomenon.
Given the more local focus of investors in the Indo-Pacific ETF industry it was not surprising that Equity Korea (+$12.6 bn) was the best-selling Lipper global classification for Q1 2026. It was followed by Equity Sector Information Technology (+$12.1 bn), Equity Taiwan (+$10.2 bn), Commodities Precious Metals (+$8.4 bn), and Alternative Equity Leveraged (+$6.1 bn).
More generally, these numbers showed the Indo-Pacific ETF segment is somewhat highly concentrated when it comes to the estimated net flows by classification. Generally speaking, one would expect the flows into ETFs to be concentrated, even as investors around the globe may have different preferences, the main trends are normally Indo-Pacific investment trends and investors use ETFs to implement their market views and short-term asset allocation decisions. These products are made and, therefore, are easy to use for these purposes.
Graph 7: Ten Best- and Worst-Lipper Indo-Pacific Classifications by Estimated Net Sales, January 1- March 31, 2026 (USD Billions)
Source: LSEG Lipper
On the other side of the table, the 10 peer groups with the highest estimated net outflows for the year accounted for $8.0 bn in outflows.
Bond USD Government (-$2.5 bn) was the classification with the highest outflows for the year. It was bettered by Equity China (-$1.8 bn), Equity Asia Pacific ex Japan (-$0.9 bn), Equity Greater China (-$0.7 bn), and Equity Theme EV and Future Mobility (-$0.5 bn).
As the bottom of the table is dominated by smaller local or niche sector classifications, it looks like Indo-Pacific ETF investors have readjusted their portfolios by reducing local, sector, or currency risk over the course of Q1 2026.
Assets Under Management by Promoters
A closer look at assets under management by promoters in the Indo-Pacific ETF industry also shows that the overall market concentration is much lower than in the other regions around the globe. 92 of the 269 ETF promoters covered in this report hold assets at or above $1.0 bn, totalling $2,338.1 bn at the end of Q1 2026. Meanwhile, only 27 ETF promoters held more than 1% of the assets under management, totalling $1,858.5 bn, or 77.52%, of the overall assets under management. Nevertheless, the largest ETF promoter in the Indo-Pacific ETF industry—Nomura Asset Management ($315.8 bn)—accounted for 13.35% of the overall assets under management, far ahead of the number-two promoter—Amova Asset Management ($144.0 bn)—and the number-three promoter—Daiwa Asset Management ($135.2 bn).
Graph 8: The 10 Largest ETF Promoters by Assets Under Management, March 31, 2026 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 51.75% of the overall assets under management in the Indo-Pacific ETF industry.
This is a much lower concentration of the assets under management at the promoter level than in other regions around the globe. Nevertheless, this meant in turn that the other 259 ETF promoters which had registered at least one ETF for sale over the observation period accounted for “only” 48.25% of the overall assets under management. More generally, it can be said that the competition for the top spots on the table of the largest ETF promoters in the Indo-Pacific is much closer than in the other regions around the globe and is driven by local ETF promoters since large international promoters such as iShares or Vanguard only play minor roles.
ETF Flows by Promoters
Since the Indo-Pacific ETF industry is quite diversified when it comes to the concentration of assets under management by promoter, it was not surprising that only four of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for Q1 2026. Samsung was the best-selling ETF promoter in the Indo-Pacific ETF industry for Q1 2026 (+$14.5 bn), ahead of Mirae Asset (+$10.8 bn) and CSOP Asset Management (+$8.0 bn).
Graph 9: Ten Best-Selling ETF Promoters, January 1 – March 31, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $56.8 bn. As for the overall flow trend over Q1 2026, it was clear that some of the 269 promoters (57) faced estimated net outflows (-$3.6 bn in total) over the course of Q1 2026.
Assets Under Management by Region
Since the Indo-Pacific region is comprised of several different individual regions, it makes sense to break down the assets under management to the underlying regions. ETFs domiciled in Japan ($728.1 bn) held the highest assets under management in the Indo-Pacific ETF industry at the end of Q1 2026. They were followed by ETFs domiciled in China ($721.0 bn), ETFs domiciled in the Asia Pacific region ($588.5 bn), ETFs domiciled in Australia and New Zealand ($215.9 bn), and ETFs domiciled in India ($112.5 bn).
Graph 10: Assets Under Management in the Indo-Pacific ETF Industry by Region – March 31, 2026 (in bn USD)
Source: LSEG Lipper
These numbers show that the assets under management in the Indo-Pacific ETF industry are distributed over all underlying regions. It also shows that the adoption of ETFs by local investors differs from one part of the Indo-Pacific ETF industry to the other.
Estimated Net Flows by Region
By reviewing the estimated flows in the Indo-Pacific ETF industry by fund domicile and the respective regions, one needs to bear in mind that some domiciles have specific advantages or disadvantages when it comes to ETF distribution.
That said, the EU countries have established a fund regulation (Undertakings in Collective Investments and Transferable Securities, or UCITS) which enables the fund and ETF industry to cross-list all products which are registered for sale in one EU country into another EU country. Since UCITS has become such a well-recognized regulatory standard for mutual funds and ETFs, some countries in South and Central America, as well as in Asia, allow UCITS funds to be cross-listed and sold to local investors. It is fair to say that there is no other regulatory framework available that allows funds to be distributed in various countries around the globe. Other mutual recognition agreements, such as those between Hong Kong and China or Hong Kong and Taiwan, are only bilateral and have no Indo-Pacific wide reach.
This means that some of the estimated flows for European ETFs also include flows from the Indo-Pacific region, hence these flows are not visible in the statistics of this report.
Graph 11: Estimated Net Flows in the Indo-Pacific ETF Industry by Region, January 1 – March 31, 2026 (in bn USD)
Source: LSEG Lipper
Asia Pacific (+$53.7 bn) was the sub-region which enjoyed the highest estimated net inflows in the Indo-Pacific ETF industry over the course of Q1 2026. They were followed by ETFs domiciled in Australia and New Zealand (+$9.8 bn), Japan (+$8.7 bn), India (+$7.9 bn), and China (+$0.1 bn).
Assets Under Management by Domicile
To investigate the concentration by region in the Indo-Pacific ETF industry further, it makes sense to analyze the assets under management by domicile. At the end of Q1 2026, the Indo-Pacific ETF industry was split into 15 domiciles. Japan was the largest single country ETF domicile ($728.1 bn) within the region, followed by China ($721.0 bn), Taiwan ($256.2 bn), South Korea ($239.6 bn), and Australia ($212.3 bn). These five ETF domiciles account for assets under management of $2,157.2 bn, or 91.17%, of the overall assets under management in the Indo-Pacific ETF industry.
Graph 12: ETF Domiciles in the Indo-Pacific ETF Industry Ranked by Assets Under Management – March 31, 2026 (in bn USD)
Source: LSEG Lipper
These numbers show that the assets under management in the Indo-Pacific ETF industry are dominated by a small number of domiciles. Obviously, this concentration is caused by the time period over which ETFs are available in the single domiciles, as well as the overall market size of these domiciles.
Estimated Net Flows by Domicile
In more detail, South Korea (+$31.7 bn) was the single fund domicile with the highest estimated net inflows in the Indo-Pacific region over the course of Q1 2026. It was followed by Taiwan (+$14.2 bn), Australia (+$9.7 bn), Japan (+$8.7 bn), and India (+$7.9 bn).
Graph 13: ETF Domiciles Ranked by Estimated Net Inflows, January 1 – March 31, 2026 (in bn USD)
Source: LSEG Lipper
The full list of the ETF domiciles in the Indo-Pacific region does an even better job of showing that ETFs are used by investors all over the region to implement their asset allocation views into their portfolios.
The views expressed are the views of the author, not necessarily those of LSEG.
This article is for information purposes only and does not constitute any investment advice.
