The number of Aussie ETF investors to pass 2m in 2023

The number of Australian exchange traded fund (ETF) investors has grown 7% year-on-year to more than two million in 2023, according to the 2023 Betashares/Investment Trends ETF Report.

On top of that, additional 310,000 Australians have expressed their interest in investing in ETFs for the first-time next year, while an existing 1.39 million ETF investors are planning to reinvest their capital next year.

However, contrary to 2023, the next year is expected to see more of Australian ETF investors to go global again, with a significant growth in interest in adding international equities exposure to their portfolios, after 2023 being a strong year of fixed income and cash investing.

“That said, we expect fixed income and cash ETFs to remain popular over the course of 2024. With the attractive yields on offer, combined with the view by many that the rate hiking cycle is nearing its end, the case for fixed income remains compelling,” Betashares’ chief executive, Alex Vynokur, said.

The research has also confirmed that diversification continued to be the single biggest driver for ETF adoption, followed by convenience while ability to gain exposure to specific overseas markets saw an uptick in responses.

At the same time, ETF investors remained generally more optimistic and hoped for higher returns and stronger portfolio growth next year.

Vynokur said that he expected on the back of growth in the number of ETF investors and ever-increasing universe of ETF solutions, net flows from investors to exceed $20 billion next year, with industry funds under management (FUM) on track to amount to more than $180 billion by the end of 2024.