SMSFs show growing interest in ETFs, managed funds

Self-managed superannuation fund investors are moving away from direct investments and instead looking to exchange traded funds (ETFs) and managed investments, according to Investment Trends.

The research house’s 2017 SMSF Investor Study found that SMSF investors have been reducing the size of their asset allocations in direct shares. They had gone from committing 45 per cent of their investments to such shares in 2013, to 37 per cent last year.

Instead, they have turned to ETFs and managed investments, both for the ease they offer and out of a desire to diversify their portfolios. ETFs provide an easy and cheap way to add numerous funds from overseas markets to a portfolio.

Related News:

Looking forward, Investment Trends found that the interest in ETFs and managed accounts was set to continue. While SMSF investors had previously pointed to bluechip, high yielding, small cap and international shares as their focus for the future, they were now leaning toward the former forms of investment.

Some of the money ordinarily invested in direct shares had also been placed in cash. Of the $180 billion SMSFs hold in cash in total, Investment Trends found that $53 billion would ordinarily be invested in market shares. SMSF investors were keeping it in cash while they worked out where to invest it outside of direct shares.

Financial planners also reported that they were increasingly turning to ETFs and managed and indexed funds to invest SMSF clients’ money. The research organisation’s 2017 SMSF Planners Study found that in the last 12 months investment of SMSF funds in managed accounts had doubled, going from five per cent in 2016 to 10 per cent last year.




Related Content

SuperFriend outlines recommendations for mental health

SuperFriend, the workplace mental health and wellbeing partner for the superannuation and insurance industry, has responded on behalf of its partners ...Read more

TelstraSuper announces chair appointment

Australia’s largest corporate superannuation fund, TelstraSuper, has announced former HESTA chief executive Anne-Marie Corboy as its incoming chair,...Read more

Major parties on the same retirement income path

You’d be forgiven for thinking there’s limited difference between the two major parties this election, with Challenger’s retirement income chair...Read more

Author

Comments

Add new comment