ETFs to increase presence in portfolios

ETFs SMSF portfolios

SMSF are likely to increase their exposure to ETFs as new research shows they are the favoured vehicle for many investors.

Investors in exchange-traded funds (ETF) plan to increase their allocations next year, including those with an SMSF, with around 50 per cent indicating ETFs would play a greater role in their portfolios in 2023, according to fund provider VanEck.

As part of its annual investor survey, VanEck said one in two investors either planned on increasing their allocation to ETFs or making an initial investment in the first half of next year. Of that group, 70 per cent were planning to invest in Australian shares and 50 per cent were planning to invest in international shares.

The survey of 2000 people aged 18 and above and, on average, in full-time employment with an income above $100,000 also found SMSF investors were active users of ETFs and would be making more use of them in 2023.

VanEck reported around one in three investors in the survey had an SMSF and ETFs were present in 92 per cent of SMSF portfolios, while nearly 50 per cent of SMSF investors planned on increasing their allocation to ETFs in 2023.

The survey also showed ETFs were the most popular investment vehicle with those surveyed at around 52 per cent, followed by shares (38 per cent), while unlisted/actively managed funds and listed investment companies were both chosen by less than 5 per cent as their favourite.

VanEck Asia-Pacific chief executive Arian Neiron said the survey confirmed the ongoing appetite for ETF products despite market conditions in the past year.

Neiron said: “2022’s bear market hasn’t deterred ETF investors. Australia’s ETF market is on track to become bigger than ever following a powerful rebound in October and a strong November. We forecast the Australian ETF sector to reach $150 billion in assets under management by the end of next year.

“Investors are increasingly turning to the cost-effective investment vehicles, which provide greater access to a diversified range of investments. The ETF industry is only going to continue to grow, with the global ETF industry forecast to grow to over $20 trillion by 2026.”

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital