More that half of all Exchange Traded Fund (ETF) assets are held by SMSFs, the latest Class SMSF Benchmark Report has revealed.
SMSF investment in ETFs has seen “exponential growth” according to the March 2018 Class SMSF Benchmark Report.
Over the last five years the percentage of SMSFs investing in ETFs has more than doubled – from 7.9% of SMSFs to 18.9%.
The percentage of SMSF assets in ETFs has more than tripled, from 0.8% to 2.5%, with the total dollars invested by SMSFs in ETFs growing from $4.2 billion to $19.6 billion.
One-third of investors in ETFs are SMSFs, but they hold over 50% of ETF assets – a proportion that has held relatively stable as the sector has grown over recent years.
“SMSFs tend to hold larger amounts than other investors with the average SMSF ETF investor holding approximately $170,000, compared to other ETF investors who hold an average of approximately $70,000,” says the Class report.
“The BetaShares/Investment Trends ETF Report noted that ETFs are increasingly popular with SMSFs and other investors, with the key drivers for investing being diversification, cost-effectiveness and access to overseas markets.”
“SMSFs mostly use ETFs to get exposure to developed market equities and as a passive investment in Australian shares. Emerging markets and Australian listed property are also relatively popular.”
International ETFs account for 54% of the top 20 ETF holdings by SMSFs, according to Class. Four of the top five most widely held ETFs by SMSFs are global or US equities, with the other being Australian property.