According to a joint BetaShares/Investment Trends ETF report, 47 per cent or 33,000 of the 96,500 ETF investors in 2012 were purchasing the funds through SMSFs, indicating that this is the key investor type for the booming sector.
“The main reason for that is that ETFs are really being adopted as a low cost and transparent way of getting exposure to various asset classes and really as building blocks for portfolio construction,” BetaShares managing director Alex Vynokur told InvestorDaily.
“So from the perspective of SMSFs the ETF allows them to execute their strategy and diversity their portfolios in a cost efficient way.”
“Because ETFs are all quoted on the ASX, from the SMSF investor’s perspective it is quite easy to access, so you can execute your strategy in a low cost and accessible way.”
The research found that while the number of ETF investors grew by 9,000 during 2012, the number of investors with any adviser influence over their most recent ETF investment only increased by 1,000.
It also noted that only approximately 30 per cent of advisers used ETFs over the year.
Mr Vynokur said that this represented an opportunity for advisers to enhance their value proposition by offering these products to clients.
“From an industry point of few there is a real opportunity to continue the education in financial advice because evidence is showing that once a client has used an ETF there is a very high repeat rate of usage,” Mr Vynokur said.
“So the key thing in terms of increasing that number from 30 per cent to the level it is at for traditional managed funds is purely a case of traditional education on one hand and continued innovation on the product side.”
