The 2025 VanEck Smart Beta Survey, which gathered 556 responses from Australian financial advisers and brokers, found that 70 per cent of advisers have increased their use of exchange-traded funds (ETF) over the past year.
The survey found that two-thirds of respondents said they anticipated an increased adoption of smart beta strategies, with 65 per cent of advisers already employing two or more.
Commenting on the findings, CEO and managing director of VanEck’s Asia-Pacific arm, Arian Neiron, said with penetration now effectively universal at 96.41 per cent, ETFs have become an “indispensable tool” for advisers targeting cost-efficient outcomes.
“We see smart beta tracking the same arc, with adoption lifting from 36.81 per cent in 2016 to 47.85 per cent in 2025,” Neiron said.
Over half of advisers said they had replaced market cap and passive exposures in client portfolios with smart beta this year – a 10.77 per cent increase since 2022. Even more advisers had done the same with active funds, at 61.27 per cent.
The asset manager has long championed smart beta ETFs, having recently expanded its range with a new growth ETF under the ticker ASX: GWTH in August.
It has consistently asserted that the strategy offers investors smarter, more specific objectives than traditional market-cap index tracking, often at a lower cost than active management.
Supporting these claims, VanEck said 99 per cent of respondents who currently use smart beta ETFs “expressed satisfaction” with the strategy.
Neiron further observed that net flows demonstrate smart beta’s adoption.
“In 2023, only two months cleared $500m. Last year, this surged to nine months, with four months crossing the $1 billion threshold for the first time,” he said.
He added that while the year has been “softer” with the broader markets pullback, six out of eight months still topped $500 million, and July set a new all-time high of $1.1 billion.
Moreover, respondents using smart beta said they increasingly favoured Australian equities, global infrastructure, and emerging markets, indicating a deeper and broader adoption of these strategies across various asset classes.
Similarly, with active fund managers in Australia falling short of their benchmarks in recent years, Global X CEO Alex Zaika asserted last month that the trend is driving increased demand for ETFs across the board.
However, Zaika contended that this perceived failing in active management has coincided with a greater uptake of simple index-tracking ETFs.
“Investors are increasingly demanding that investment managers provide better returns at lower cost,” he said at the time.
Looking elsewhere in the survey’s findings, a quarter of financial advisers were found to personally invest in cryptocurrency.
However, only 16 per cent said they are currently invested or considering investing on behalf of clients.
Additionally, 60 per cent of financial advisers said they allocate to private markets, predominantly through single private market funds and listed vehicles. Despite this, almost two-thirds of these respondents do not intend to increase their private market allocation in the next three years.
Finally, at least half of respondents said they currently use an SMA/managed account with investment track records and credibility being identified as the two key factors for those considering its use.
