Exchange traded funds (ETFs) have become a mainstay in the Australian investment landscape, and iShares is a name that comes up more than most. As we step into 2025, Australians are increasingly turning to iShares for portfolio diversification, cost efficiency, and global exposure. But is iShares the right fit for your investment strategy this year?
What Sets iShares Apart in 2025?
iShares, owned by BlackRock, is the world’s largest ETF provider and a major player on the ASX. With over 40 funds listed in Australia, iShares gives investors access to domestic and global equities, fixed income, ESG (environmental, social, and governance) options, and thematic funds. In 2025, several factors set iShares apart:
- Competitive fees: Many iShares ETFs have continued to cut management costs, with core funds such as iShares Core S&P/ASX 200 ETF (IOZ) charging just 0.09% per annum.
- Regulatory focus: ASIC’s ongoing scrutiny of ETF labelling and liquidity has prompted iShares to further refine disclosures and compliance, offering more transparency for investors.
- Innovation: New launches in 2024–25 include climate-focused funds and targeted bond ETFs, responding to growing demand for sustainable and income-generating investments.
How Australians Use iShares ETFs in 2025
Australian investors are leveraging iShares ETFs in several strategic ways. Here are some practical approaches:
- Core portfolio building: Investors use broad-market ETFs like IOZ or iShares S&P 500 ETF (IVV) as foundational holdings. These offer instant diversification across hundreds of companies for a fraction of the cost of buying individual shares.
- International exposure: With the Australian dollar’s volatility and domestic market concentration, funds like iShares MSCI World ETF (IHWL) and iShares Asia 50 ETF (IAA) provide access to regions otherwise difficult for retail investors to reach.
- Thematic and ESG investing: 2025 has seen a surge in demand for funds aligned with climate action and social responsibility. For example, the iShares Global Clean Energy ETF (ICLN) is popular among those wanting exposure to renewables without picking individual stocks.
- Income and defensive strategies: As interest rates remain a key topic, bond-focused ETFs such as iShares Core Composite Bond ETF (IAF) have been used to balance risk and seek reliable income streams.
Example: A typical diversified Australian portfolio in 2025 might allocate 40% to IOZ, 30% to IVV, 20% to IAF, and 10% to ICLN, blending growth, income, and sustainability.
Key Considerations for 2025 Investors
Before jumping into iShares ETFs, here’s what Australians should weigh in 2025:
- Costs and liquidity: While iShares is known for low fees, always check bid-ask spreads and on-market liquidity, especially for niche or new ETFs.
- Tax implications: Australian-domiciled iShares ETFs (like IOZ) simplify tax reporting compared to some international-domiciled counterparts (like IVV), which may involve foreign withholding tax and US estate tax considerations.
- Product transparency: New ASIC regulations mean clearer disclosures, but always read the Product Disclosure Statement (PDS) to understand underlying holdings and risks.
- Responsible investing: For those with ESG priorities, scrutinise the actual screens and methodology of iShares’ sustainable products—2025 has seen greater differentiation between ‘light green’ and ‘dark green’ funds.
The 2025 ETF Landscape: What’s Next for iShares?
The Australian ETF market crossed $180 billion in FUM by early 2025, with iShares retaining a leading market share. BlackRock has signalled more launches focused on global megatrends (such as AI, battery technology, and ageing populations) and enhanced ESG metrics. Expect further fee competition as new entrants push innovation and value.
For Australian investors, iShares’ scale, track record, and expanding lineup make it a formidable option. However, comparison is crucial: rival providers like Vanguard, BetaShares, and VanEck are all pushing the bar higher in product design and cost.
Conclusion
iShares remains a top choice for Australians seeking to build or refine an ETF portfolio in 2025. With low fees, broad access, and responsive product innovation, iShares funds can play a valuable role in achieving your financial goals. As always, ensure each ETF fits your personal strategy and read the fine print before investing.
