ETFs, Investments

SMSFs remain ETF pioneers

While SMSF investors now make up a smaller proportion of investments in exchange-traded funds (ETF), they can still be considered pioneers with regard to these types of products, a research executive has said.

Speaking at the release of the “BetaShares/Investment Trends Annual ETF Report for 2018” yesterday, Investment Trends chief executive Michael Blomfield said: “We see SMSFs as sort of the canary-in-the-mine investor.

“They tend to be more active or engaged and ahead of the trend.

“They do tend to be doing things today that we see retail investors do in a year or two years’ time.”

BetaShares chief executive Alex Vynokur said evidence of the impact SMSF investors are having on the ETF sector can be seen in the fund flows for the fixed income asset class.

The report showed this type of offering in 2018 accounted for 20.9 per cent of all ETF net flows, up from 14.6 per cent the previous year.

According to Vynokur, this reflected the investment priorities of SMSF members moving into retirement where the focus shifts more toward capital preservation as opposed to capital growth.

Overall, the study revealed SMSFs are contributing less to the overall funds under management of ETFs, falling from 45 per cent in 2013 to 31 per cent in 2018.

However, Blomfield pointed out this was not an indication ETFs are losing favour among SMSFs, but rather a reflection of the appeal these products are having among the broader investment community outside of SMSFs.

The survey for the report was conducted between August and October 2018, attracting 7900 valid responses, including 2486 respondents currently using ETFs.

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