New data released by BetaShares has shown that the number of SMSFs holding ETFs reached 400,000 in 2022, an increase from 370,000 in 2020.
According to findings from the 2022 BetaShares Investment Trends ETF Report, the proportion of investors holding their ETFs via their SMSF remained relatively steady this year at 21 per cent compared to 22 per cent a year earlier.
“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,” said BetaShares senior investment strategist Cameron Gleeson.
“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.”
Of those SMSF investors holding ETFs, 72 per cent cited diversification as one of the top three reasons for using ETFs, along with access to specific international exposures (52 per cent) and time savings compared to choosing individual stocks (50 per cent).
“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,” explained Mr Gleeson.
“The choice of ETF exposures on offer has steadily increased to include asset classes like listed property, infrastructure, equity sectors and thematic exposures.”
SMSF investors highlighted international equities (78 per cent), Australian equities (72 per cent), thematic exposures (28 per cent), Australian property (28 per cent) and infrastructure (22 per cent) as the top five asset classes that they invest in through ETFs.
“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,” Mr Gleeson predicted.
The 2022 BetaShares Investment Trends ETF Report also found that 1.9 million Australians are now invested in ETFs and 1.4 million existing ETF investors are planning to increase their allocation to the funds over the next year.
Separately, VanEck recently reported that around one in three Australian investors had an SMSF, with ETFs featuring in 92 per cent of SMSF portfolios. The firm has predicted that the assets under management of the local ETF industry will hit $150 billion in 2023.
