Over the past 12 months there has been a noteworthy demographic shift occurring within the exchange-traded fund (ETF) sector when it comes to SMSF users specifically, an ETF issuer has revealed.
“Of our existing ETF users, one in three are retired and the average age of an existing ETF user at the moment is about 51 years old,” BetaShares managing director Alex Vynokur told selfmanagedsuper.
“But interestingly, the age of clients acquiring ETFs for the first time in the last 12 months is actually 39 years, so we’re seeing a significant change in the demographic profile of first-time ETF clients.
“This shows that ETFs are really becoming more mainstream than in previous years.”
Vynokur added diversification continued to be a relevant theme for SMSF investors.
“We are seeing a large number of clients who are adopting ETFs specifically for that international exposure, and an exposure to Asia is certainly a good example of that, as well as Europe and Japan as more general areas,” he noted.
“I’d say exposure to equities in global growth sectors has been the key driver of SMSF adoption.
“Global growth sectors are the area where we’ve seen a significant amount of demand from an SMSF investor.
“So SMSF investors are certainly beginning to look beyond our own backyard for investment opportunities and that’s translated into flows for the ETF industry, and that’s also translated into a significant number of inquiries in expression of interest from both our existing SMSF investor base and also new investors.”
He highlighted that while ETFs were becoming more mainstream among other investor types, particularly retail, SMSFs were still very much a key driver behind the growth of ETFs.
“What we are observing on one hand is continued adoption of ETFs across a greater number of SMSFs, so more and more SMSFs are using ETFs in their portfolios,” he said.
“But on the other hand, at the same time we’re seeing a number of existing SMSFs who are ETF users start to allocate a greater proportion of their overall portfolio towards ETFs.”
According to the BetaShares “Australian ETF Review May 2017”, net inflows lifted the Australian ETF industry by 2.6 per cent, or $733.7 million, to hit a new record high of $29 billion in funds under management.
Most of the month’s industry growth came from net new money, $57.8 million, rather than asset appreciation.