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Launch of BetaShares/Investment Trends ETF Report

BY Ilan Israelstam | 10 March 2014
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Last week we launched, in collaboration with the research firm Investment Trends, the BetaShares/Investment Trends ETF Report 2013. This is the fourth year we’ve been involved with this effort which represents the leading comprehensive quantitative and qualitative research study of Australian ETF users available to the market, based on responses of 10,421 investors and 734 advisers on their experiences and usage of ETFs. For a full copy of the summary report, please click here. In this post we highlight some of the key findings of the report:

November 2013 ETF Report - Media Release-v3_Page_06
In a very positive sign for the industry, the report findings were that the number of  investors in ETFs has surged dramatically over the past year to over 100,000. Investor numbers have increased 50% in the 12 months to November 2013, the fastest growth seen in the last four years.
Of the estimated 102,500 ETF investors, 46,000 investors held ETFs through SMSFs, illustrating the continued importance of this investor class in driving industry growth. The report also noted that over 50% of investors were using ETFs to gain overseas market exposure vs. approximately 40% last year, highlighting the value investors see in utilising ETFs as an access vehicle.
After reaching a record high of $10 billion in funds under management at the end of 2013, this year looks set to be equally strong for ETF growth. A record ~79,000 non-ETF investors  plan to invest in ETFs in the next 12 months, while 70,500 current ETF investors also plan to make an additional investment in ETFs in 2014.
November 2013 ETF Report - Media Release-v3_Page_08

Gap remains in adviser influenced ETF investments

Mirroring the growth in usage by individual investors, adviser usage of ETFs grew from 28% to 33% of advisers – the highest level to date. However, while 33,000 new ETF investors joined the market in 2013, the percentage of investors who said their adviser played a role in this investment remained at 26%, the same as last year’s figure. This gap between self-directed and adviser influenced ETF investing means planners still have a considerable opportunity in front of them to get involved in their clients’ ETF investment decisions.

ETF growth not affecting other asset classes

The majority of ETF investments in 2013 came from new money being placed into the market, rather than being redirected from other asset classes. A full 64% of ETF investors made incremental investments to ETFs rather than reducing their exposure to other investments such as direct shares, term deposits.

Australian ETFs – the future

Over the course of 2013, 11 new products were launched on the exchange, and we believe that over the course of the next few years the ETF product range will continue evolving in the Australian market. From an investor numbers perspective, the ETF report forecasts the total number of ETF investors to range from 126,000-174,500 by end 2015.

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