Big super funds should be using ETFs

financial-planning/funds-management/investment-management/ETFs/

25 November 2016
| By Mike |
image
image
expand image

Large Australian Prudential Regulation Authority (APRA) regulated superannuation funds should be considering the use of exchange traded funds (ETFs), according to actuarial research house, Rice Warner.

In an analysis published this week, Rice Warner suggested large APRA regulated superannuation funds had a particularly strong motivation for including ETFs in their member direct investment options.

It said member direct options were largely intended to stem the flow of members with big balances to self-managed superannuation funds (SMSFs), the earliest and strongest supporters of Australian listed ETFs.

"In short, no investment option designed as an alternative to self-managed superannuation would seem complete without ETFs," the Rice Warner analysis said.

It said that despite the growth in their popularity, the total capitalisation of Australian listed ETFs represented only a minute proportion of Australia's superannuation and non-superannuation market.

"The influence of ETFs is, however, much wider than sheer dollars suggest," Rice Warner said. "ETFs and traditional index funds are making investors more aware of the impact of high investment management costs on their real returns and have contributed to the reduction of investment management fees over recent years."

It said more individual investors and their advisers, including robo advisers, were likely to use ETFs and traditional index funds to provide a diversified, low-cost base to portfolios.

"This should provide more time to focus on individual investment selection, on appropriate asset allocations and on efficient wealth management," the Rice Warner analysis said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 4 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND