ETFs to come to the fore in 2023: VanEck
Exchange traded funds (ETFs) look to be one of the most popular investment vehicles in the coming year, according to an investor survey.
Of the more than 2,000 people who took part in the 2022 VanEck Australian Investor Survey, one in two said they would be either increasing their allocation to ETFs or making their first ETF investment in the next six months.
Some 70% of respondents planned to invest in Australian shares while almost half planned to invest in international shares.
Just 13% stated they did not plan to invest at all next year.
According to Arian Neiron, VanEck Asia Pacific CEO and managing director, “2023 is going to be a defining year for investors.”
“While Australia is better placed than many other countries, with a lower inflation rate and wage growth not as strong as the US, we see the Australian share market outperforming the US next year with investors gravitating toward sectors including gold, and sectors that can provide defense against inflation, such as infrastructure and fixed income where yields have rallied with the inflationary environment,” he elaborated.
Almost half planning of self-managed superannuation fund (SMSF) investors said they planned to increase their SMSF allocation to ETFs and ETFs featured in over 90% of SMSF portfolios.
Neiron observed: “2023’s bear market hasn’t deterred ETF investors. Australia’s ETF market is on track to become bigger than ever following a powerful rebound in October and a strong November. We forecast the Australian ETF sector to reach $150 billion in AUM by the end of next year.
“Investors are increasingly turning to the cost-effective investment vehicles which provide greater access to a diversified range of investments. The ETF industry is only going to continue to grow, with the global ETF industry forecast to grow to over $20 trillion by 2026.”
Overall investor confidence was on the rise, per the survey. Over 80% of investors reported feeling confident about their portfolios on a 5+ year basis. In the medium term, too, the outlook appeared good, with more than 65% stating they felt confident for the one to five-year period.
“The survey confirms many investors will be seeking out buying opportunities next year as compelling valuations present themselves,” said Neiron.
“A slowing economy and falling inflation should see ‘quality’ companies with strong balance sheets, stable earnings and high return on equity come to the fore. These quality characteristics have outperformed before, and 2023 may be their time to shine again.”
AUTHOR
Rhea Nath
Recommended for you
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
