Self-managed superannuation funds (SMSFs) have quadrupled their investment in exchange-traded funds (ETFs) over the last five years, the latest Class SMSF Benchmark Report has revealed.
Over that period, SMSF investment in ETFs jumped from $4.2 billion to $19.6 billion. The portion of SMSFs using ETFs also increased, from 7.9 per cent to 18.9 per cent.
SMSFs also represented a significant portion of ETFs investors at one third, holding more than 50 per cent of total ETF asset value.
The key drivers for ETF investment was diversification, cost-effectiveness and access to international equities.
“The continued growth of ETF investment by SMSFs indicates that investors are increasingly aware of the importance of diversification. The investment opportunities delivered by ETFs provide SMSFs with exposure to a broader mix of assets than were previously available, allowing them to expand their investment horizons,” Class chief executive, Kevin Bungard said.