The Indo-Pacific ETF industry enjoyed strong inflows over the course of the first half of 2026, a period which was dominated by macroeconomic themes. Geopolitics, inflation, fiscal sustainability, and monetary policy were driving the markets. Within this environment global equities finished the period close to record highs, and bond markets experienced significant volatility as investors reassessed inflation risks and the outlook for interest rates.
The biggest catalyst was the conflict in Iran and the disruption of shipping through the Strait of Hormuz. The closure of a route that carries a significant share of global oil exports sent energy prices sharply higher during the spring and reignited concerns that inflation would prove more persistent than previously expected. The resulting rise in oil, transport and insurance costs affected economies across the globe, forcing investors to re-evaluate the trajectory of growth and inflation.
Political developments helped reverse part of that shock by June. Diplomatic progress between the United States and Iran led to an agreement that reopened the Strait of Hormuz, triggering a steep decline in oil prices and easing fears of a prolonged supply disruption. Brent crude retreated toward pre-conflict levels, improving investor sentiment and supporting a broad rally in risk assets.
Monetary policy diverged substantially across the major economies. The Federal Reserve was at the center of another important political development during the first half of 2026: the arrival of Kevin Warsh as the new Fed Chair. Warsh succeeded Jerome Powell in May, marking the beginning of a new chapter for U.S. monetary policy. Despite the leadership change, the Fed spent most of the period holding interest rates in the 3.50% to 3.75% range as policymakers grappled with the inflationary effects of the Middle East energy shock and a still resilient labor market. By mid-year, investors had largely abandoned expectations of imminent rate cuts and instead focused on the possibility that U.S. interest rates would remain elevated for longer than previously anticipated. The shift contributed to higher Treasury yields and periodic volatility in both bond and equity markets.
The European Central Bank moved in the opposite direction. After initially pausing its easing cycle, the ECB became increasingly concerned about renewed inflationary pressures linked to higher energy costs. In June it raised rates, signalling that price stability had once again become its primary concern despite weaker growth prospects across parts of the euro area. The move marked one of the most important policy shifts of the year and underscored the differing inflation dynamics between Europe and the United States.
Japan also moved away from ultra-loose monetary policy. The Bank of Japan continued its normalization process and raised rates to levels not seen since the mid-1990s. Higher inflation and concern over yen weakness encouraged policymakers to continue tightening, ending an era in which Japan had stood apart from the global rate cycle.
Fiscal policy remained a significant concern throughout the period. As bond yields rose in response to inflation concerns and central-bank policy uncertainty, debt servicing costs increased across major economies. Investors increasingly scrutinized government borrowing plans, particularly in the United States and Europe, contributing to periodic bouts of bond market volatility.
Equity markets proved remarkably resilient. Artificial intelligence remained the dominant investment theme, although leadership shifted from the largest technology platforms toward semiconductor, memory, and infrastructure providers benefiting from AI spending. European shares outperformed during periods when oil prices fell, while U.S. equities were supported by strong corporate earnings and persistent investor demand for technology-related assets. By the end of June, many major indices were trading near record highs despite the geopolitical turbulence earlier in the year.
Bond markets told a more complicated story. Sovereign yields climbed sharply during the energy shock before stabilizing as oil prices retreated. Investors remained cautious, given continued inflation uncertainty, fiscal pressures, and increasingly divergent central bank policies. Global government bonds delivered mixed returns, while corporate credit generally held up better thanks to resilient economic growth and healthy corporate balance sheets.
By the end of H1 2026, investors had become cautious over sector and single company risks but were still in risk-on mode. The focus shifted to whether inflation would continue to moderate and whether central banks could engineer a soft landing while governments grappled with growing fiscal burdens.
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 increasing assets under management (from $2,428.3 bn as of December 31, 2025, to $2,684.5 bn at the end of June 2026). At a closer look, the increase in assets under management of $256.2 bn for H1 2026 was driven by the performance of the underlying markets (+$127.8 bn), while estimated net inflows added (+$128.5 bn) to the assets under management.
That said, the high estimated net flows are 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 – June 30, 2026 (USD billions)
Source: LSEG Lipper
As for the overall structure of the Indo-Pacific ETF industry, it was not surprising equity ETFs ($2,133.6 bn) held the majority of assets, followed by bond ETFs ($302.0 bn), commodities ETFs ($84.1 bn), alternatives ETFs ($74.2 bn), money market ETFs ($54.6 bn), mixed-assets ETFs ($19.1 bn), and “other” ETFs ($16.9 bn).
Given the market environment, it is not surprising that the overall assets under management in the Indo-Pacific ETF industry, as well as the assets under management for alternatives ETFs, bond ETFs, equity ETFs, mixed-assets ETFs, and money market ETFs marked a month end all-time high at the end of June 2026.
Graph 2: Market Share, Assets Under Management in the Indo-Pacific ETF Industry by Asset Type, June 30, 2026
Source: LSEG Lipper
ETF Flows by Asset Type
After enjoying the highest quarterly inflows on record (+$80.2 bn) over the course of Q1 2026, the inflows into ETFs in the Indo-Pacific region slowed down over the course of Q2 2026, driven by geopolitical and some economic headwinds.
Graph 3: Estimated Net Sales, January 1, 1998 – June 30, 2026 (USD Billions)
Source: LSEG Lipper
The impressive estimated net flows over the course of Q1 2026 might be seen as proof that the acceptance and adoption of ETFs by Indo-Pacific investors has further increased. That said, the trend of the estimated net inflows, is on course to reach a new full record at the end of the year, despite the slowdown in estimated net flows over the course of Q1 2026.
The inflows in the Indo-Pacific ETF industry for 2026 so far were driven by equity ETFs (+$93.4 bn), followed by alternatives ETFs (+$19.2 bn), commodities ETFs (+$8.6 bn), mixed-assets ETFs (+$7.7 bn), money market ETFs (+$1.6 bn), and bond ETFs (+$0.7 bn). On the other side of the table, “other” ETFs were the only asset type posting outflows (-$2.6 bn) for H1 2026.
Graph 4: Estimated Net Sales by Asset Type, January 1 – June 30, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was no surprise to see high estimated net inflows into ETFs led by equity ETFs over the course of H1. Opposite to the other regions of the world, alternatives, commodities, mixed-assets, and money market ETFs witnessed higher inflows than bond ETFs. 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 H1 2026, the Indo-Pacific ETF market was split into 162 different Lipper Global Classifications (LGCs). The highest assets under management at the end of H1 2026 were held by ETFs classified as Equity Japan ($778.8 bn), followed by Equity Sector Information Technology ($238.4 bn), Equity Taiwan ($213.7 bn), Equity China ($162.8 bn), and Equity U.S. ($120.2 bn). These five peer groups accounted for 56.39% of the overall assets under management in the Indo-Pacific ETF industry, while the 10-top classifications by assets under management accounted for 72.13%.
Overall, 16 of the 162 classifications each accounted for more than 1% of assets under management. In total, these 16 classifications accounted for $2,224.0 bn, or 82.85%, of the overall assets under management.
Graph 5: Ten Largest Lipper Global Classifications by Assets Under Management, June 30, 2026 (USD Billions)
Source: LSEG Lipper
There were a lot of change on the table of the 10 largest classifications by assets under management in the Indo-Pacific ETF industry over the course of Q2 2026. The classifications on the table are also quite different from the leading classifications in other regions, which showcases that investors in the Indo-Pacific region have other preferences compared to the U.S. or Europe.
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, June 30, 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 $118.7 bn. In line with the overall sales trend for H1 2026, equity peer groups (+$90.2 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 Taiwan (+$26.2 bn) was the best-selling Lipper global classification for H1 2026. It was followed by Equity Sector Information Technology (+$23.4 bn), Equity U.S. (+$13.9 bn), Alternative Equity Leveraged (+$13.5 bn), and Equity Korea (+$10.1 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 in the Indo-Pacific region were regional 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- June 30, 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.
Equity Japan (-$6.1 bn) was the classification with the highest outflows for the year so far. It was bettered by Bond USD Government (-$5.1 bn), Equity China (-$3.9 bn), “Unclassified ETFs” (-$2.6 bn), and Bond Other (-$0.8 bn).
As the bottom of the table is dominated by all kind of classifications, it looks like Indo-Pacific ETF investors have readjusted their portfolios to the current market environment by reducing asset type, geographic, sector, or currency risk over the course of H1 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. Ninety-five of the 271 ETF promoters covered in this report hold assets at or above $1.0 bn, totalling $2,656.3 bn at the end of H1 2026. Meanwhile, only 26 ETF promoters held more than 1% of the assets under management, totalling $2,077.3 bn, or 77.38%, of the overall assets under management. Nevertheless, the largest ETF promoter in the Indo-Pacific ETF industry—Nomura Asset Management ($368.4 bn)—accounted for 13.72% of the overall assets under management, far ahead of the number-two promoter—Amova Asset Management ($168.4 bn)—and the number-three promoter—Daiwa Asset Management ($158.1 bn).
Graph 8: The 10 Largest ETF Promoters by Assets Under Management, June 30, 2026 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 53.24% 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 261 ETF promoters which had registered at least one ETF for sale over the observation period accounted for “only” 46.76% 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 three of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for H1 2026. Samsung was the best-selling ETF promoter in the Indo-Pacific ETF industry for H1 2026 (+$20.4 bn), ahead of Mirae Asset (+$17.2 bn) and Yuanta Funds (+$13.0 bn).
Graph 9: Ten Best-Selling ETF Promoters, January 1 – June 30, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $98.3 bn. As for the overall flow trend over H1 2026, it was clear that some of the 271 promoters (62) faced estimated net outflows (-$11.3 bn in total) over the course of H1 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 ($845.0 bn) held the highest assets under management in the Indo-Pacific ETF industry at the end of H1 2026. They were followed by ETFs domiciled in the Asia Pacific region ($776.9 bn), ETFs domiciled in China ($696.5 bn), ETFs domiciled in Australia and New Zealand ($245.1 bn), and ETFs domiciled in India ($121.0 bn).
Graph 10: Assets Under Management in the Indo-Pacific ETF Industry by Region – June 30, 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 – June 30, 2026 (in bn USD)
Source: LSEG Lipper
Asia Pacific (+$98.7 bn) was the sub-region which enjoyed the highest estimated net inflows in the Indo-Pacific ETF industry over the course of H1 2026. They were followed by ETFs domiciled in Australia and New Zealand (+$20.2 bn), India (+$10.7 bn), and China (+$0.1 bn), while ETFs domiciled in Japan (-$1.3 bn) faced outflows.
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 H1 2026, the Indo-Pacific ETF industry was split into 15 domiciles. Japan was the largest single country ETF domicile ($845.0 bn) within the region, followed by China ($696.5 bn), Taiwan ($348.6 bn), South Korea ($325.0 bn), and Australia ($240.9 bn). These five ETF domiciles account for assets under management of $2,456.0 bn, or 91.49%, 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 – June 30, 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 (+$56.4 bn) was the single fund domicile with the highest estimated net inflows in the Indo-Pacific region over the course of H1 2026. It was followed by Taiwan (+$33.4 bn), Australia (+$20.0 bn), India (+$10.7 bn), and Hong Kong (+$7.9 bn).
Graph 13: ETF Domiciles Ranked by Estimated Net Inflows, January 1 – June 30, 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.
