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SMSFs increase usage of ETFs
There are 400,000 self-managed superannuation funds (SMSFs) holding exchange traded funds (ETFs), according to BetaShares.
This was up from 370,000 in 2020 and investors preferred to invest in international equities (78%) and Australian equities (72%).
A smaller percentage opted to use their ETFs to invest in thematic exposures (28%), Australian property (28%) and infrastructure (22%).
The top reason for using ETFs was diversification, cited by almost three-quarters of SMSF investors, followed by ability to gain access to specific international exposures and time savings compared to choosing individual stocks.
Cameron Gleeson, senior investment strategist at BetaShares, said: “SMSFs were one of the early adopters of ETFs. At that point, SMSFs were attracted to the transparent, convenient and cost-effective nature of ETFs and used the popular investment vehicle to obtain exposure to more difficult to access asset classes, like international equities.
“Fast forward to 2022, and more SMSFs than ever before are holding ETFs as they continue to take advantage of the inherent benefits of ETFs to build and grow their retirement nest egg.
“They are now using ETFs for portfolio completion across all asset classes, for example replacing high-cost active unlisted funds in fixed income and using ETFs in place of direct ASX-listed stock holdings for greater diversification.
“We expect the number of SMSFs holding ETFs to steadily grow in line with growth from previous years, particularly as more investors of all types use ETFs to progress on their financial goals.”
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
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