POWERED BY MOMENTUM MEDIA
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.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
