ETF take-up still slow despite the hype

ETF, Damien Sherman, Vanguard, Vanguard ETF, Vangaurd Australia, SMSF, SMSF Trustee, SMSF adviser, financial advice, asset allocation, portfolio management, wealth management, wealth planning, retirement planning, retirement wealth, retirement savings,

Knowledge of ETFs is on the rise but the Nest Egg Retirement Sentiment Survey found less than 10 per cent of investors said they held these assets.

The data taken from the recent survey suggested ETFs account for only 5.35 per cent of assets held by Australians, with domestic shares and residential property being vastly more popular with 45.45 per cent and 17.65 per cent of votes respectively.

However, the low figure given for ETFs is “not that surprising” according to Damien Sherman, the head of ETF capital markets at Vanguard Australia.

Mr Sherman noted that more than half of survey respondents were involved in some capacity with the SMSF sector, with most of these people being SMSF trustees.

“We estimate the SMSF market in Australia to be around $500 billion,” Mr Sherman said, “and the Australian ETF market to be around $30 billion”.

With the size of the ETF market being close to only 5 or 6 per cent of the overall SMSF market, ETFs' representation as 5.35 per cent of held assets is “pretty reflective” of broader trends, Mr Sherman said.

“It’s not a large volume of assets under management comparatively,” Mr Sherman said, “but it points to the growth story that lies ahead for ETFs.”

“Growth in the ETF market is showing no signs of abating, if anything it’s speeding up and starting to attract more investors.”

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