Non-advised SMSF investors looking to invest in overseas technology stocks rely heavily on direct information from exchanged-traded fund (ETF) providers to boost their knowledge, posing an education challenge to issuers, according to BetaShares.
BetaShares chief executive Alex Vynokur said while SMSF investors who receive financial advice adopt overseas technology stocks in their investment portfolios, self-directed investors look to ETF issuers for education on these stocks.
“I suppose this presents a bit of an education challenge, which on the flip side is obviously an opportunity because educating clients about investment opportunities is pretty important,” Vynokur told selfmanagedsuper.
There is still significant bias towards domestic stocks in Australian SMSF portfolios, which are still dominated by Australian mining and financials shares, but he warned while sectors such as financial services have enjoyed fruitful returns in recent years, it is hard to expect the same levels of growth going forward.
“Again, if equities are about growth, technology is going to be the growth hedge really of that part of asset allocation. And investing in technology [stocks] outside of Australia is definitely an important consideration for Australian investors,” he noted.
BetaShares recently launched its Asia Technology Tigers ETF, which provides access to a portfolio of the top 50 companies by market capitalisation in the technology and online retail industries in Asia excluding Japan.
Top exposures by company include Taiwan Semiconductor Manufacturing Company, Alibaba Group Holdings, Samsung Electronics and Tencent Holdings.
The ETF product has attracted on average more than $1 million a day since it was launched over a week ago.
While the product has received reasonable support from SMSF investors, strongest adoption has been by financial planners and brokers.
“In our experience certainly using ETFs to be able to obtain a diversified exposure to a portfolio of technology stocks has probably been one of the most popular ways to use an ETF,” Vynokur said.