ETFs remain most popular investment vehicle in 2023

The exchange traded funds (ETFs), with the industry in Australia expected to reach $180 billion by the end of 2024, have remained by far the most popular investment vehicle, according to the 2023 VanEck Australian Investor Survey.

Against the backdrop of the decline in actively managed funds, the data from the study has found that 60% of Australian investors were either planning on increasing their allocation to ETFs or making their first investment in ETFs in the next six months, with one in two investors planning or increasing their allocation to ETFs within their self-managed super fund (SMSF) portfolio.

When it comes to asset classes, Australian equities remained a preferred option for 65% of respondents and were followed by international shares with 50% of surveyed investors saying they were planning to invest in this asset class next year.

While 84% of all respondents of the survey, which was conducted last month, said they would recommend ETFs to fellow investors, only 3% of investors selected unlisted/actively managed funds and even less (2%) said went for listed investment companies (LICs).

As far as sectors were concerned, the survey has revealed that technology and healthcare proved to be the most popular among investors with 50% and 40%, respectively, considering investments in these sectors next year.

However, the breakdown by age groups has additionally shown that resources remained the single most popular and favoured sector among baby boomers, followed by healthcare, and technology a close third.

Surprisingly, the vast majority of respondents (74%) said that they would not be looking to invest in environmental,social,governance (ESG) funds in 2024.

“While the economic turbulence of 2023 is likely to continue into 024, it’s clear that investors are still seeking opportunities and are confident in the long-term benefits of investing in ETFs,” VanEck Asia Pacific CEO and Managing Director, Arian Neiron, said.

“This year has further shown the resilience and popularity of ETFs, as well as the decline in actively managed funds.”