Self-directed investors embrace ETFs
Self-directed investors have become increasingly aware about exchange traded funds (ETFs) and have helped increase ETF trading activity during the COVID-19 pandemic, according to ETF Securities.
Investors were drawn to these products as they offered cost-efficiency and easy access to the market.
ETF Securities’ head of distribution, Kanish Chugh, said that although ETF usage was traditionally dominated by financial intermediaries, such as advisers, planners and brokers, this year saw a shift with a huge jump in self-directed usage as investors sought to take control of their portfolios and sought out new opportunities.
“While trading volumes for ETFs may have settled from March peaks, usage of ETFs is anticipated to continue to grow as is the range of investment options available in Australia. The popularity of new trading platforms with an ETF bent, such as Superhero or Pearler, further aids the take-up of ETFs,” Chugh said.
“Leveraged exchange traded products have jumped in popularity as investors looked to benefit from opportunities presented by more volatile markets this year. Safe-haven assets have also been popular, with gold-backed ETFs a notably strong performer across the year.”
According to the firm’s Q4 report on the Australian ETF landscape, global technology remained the big focus of the year, with investments in the FAANGs or the tech sector funds being popular with both buy-and-hold investors and short-term traders.
The report also found that in just over three years, the Australian ETF market has doubled its funds under management to over $73 billion.
AUTHOR
Oksana Patron
Recommended for you
Women are expected to inherit US$124 trillion through the intergenerational wealth transfer, but Capital Group has found they are twice as likely to rely on social media for advice over a financial adviser.
Challenger Investment Management has raised $350 million during the offer period for its new ASX-listed investment structure.
A week after Lonsec downgraded multiple funds from Metrics Credit Partners, rival research house Zenith Investment Partners has opted to retain its ratings for the same funds.
Strong adviser engagement has helped Praemium reach $1 billion in inflows on its Spectrum offering, with a deal with Western Australian wealth firm Euroz Hartleys expected to add as much as $2 billion.
