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Home / SMSFs / SMSF investing / Most popular investments for SMSFs / SMSF investment: 20 most popular ETFs

SMSF investment: 20 most popular ETFs

November 16, 2020 by Barbara Drury 1 Comment

Reading time: 3 minutes


This article lists the 20 most popular ETFs invested in by SMSFs as of 30 June 2020. This article uses data supplied by BGL, an SMSF administration software company, and is based on a statistical analysis of more than 25% of the 200,000 SMSFs administered using BGL software. We thank BGL for giving SuperGuide access to such valuable data.

See also

  • SMSF investment: 20 most popular Australian shares
  • SMSF investment: 20 most popular international shares
  • SMSF investment: 20 most popular managed funds
  • Ron Lesh (CEO of BGL) discusses some of the main insights from the data

ETFs (Exchange-traded funds) are a relatively young investment product, born in the 1990s, which have quickly become popular with investors. As the name suggests, ETFs can be bought and sold on the ASX like ordinary shares but offer the diversification of managed funds.

Each ETF is designed to reflect the performance of a particular market – whether that’s a share index such as the ASX200 or the S&P500, a grouping of national markets such as Emerging Markets, an industry such as Healthcare or an asset class such as Global Property. New breeds of ETFs are being developed all the time and there are now over 240 ETFs available on the ASX. SMSFs on BGL’s database hold an interest in 153 ETFs, an indication that they are diving deeper into ETF waters.

SMSF investors have embraced ETFs because they offer a simple, easy to trade, low-cost way to diversify, especially when it comes to global markets. Because most ETFs are passively managed – tracking an entire index rather than picking winners – fees are generally low. And, as we all know by now, low fees can boost returns.

Some large superannuation funds now offer the ability for members to invest in ETFs, but SMSFs have shown a growing appetite for the products. As well as cost and ease of trading, ETFs allow self-directed investors to plug gaps in their portfolio as well as make tactical changes to their asset allocation in response to market moves.

BGL data shows the number of SMSFs holding ETFs in June 2020 increased slightly to 15.2%, whereas funds holding direct shares and traditional managed funds all fell slightly. ETFs are now held by almost as many SMSFs as traditional managed funds (17.4% of funds).

International and Domestic ETFs.

As previously mentioned, ETFs provide a cost-effective way to gain exposure to overseas markets, especially developed market shares. This is reflected in the fact that international ETFs account for 12 of the 20 most popular ETFs invested in by SMSFs.

That said, Vanguard’s Australian shares Index ETF and Australian Property Securities Index ETF remain the top two funds. Despite the turmoil on global markets in the first half of 2020, Australian equities experienced the biggest inflows across the market according to the BetaShares Australian ETF Review – Half Year 2020.

There was also an increase in the number of SMSFs investing in the Vanguard Australian Shares High Yield ETF, reflecting the never-ending search for a decent yield in a low interest rate world.

Two other themes also emerged. Two ETFs that attracted a growing number of SMSF investors in the June 2020 quarter were the iShares Global Healthcare ETF and the Betashares Nasdaq 100 ETF. The healthcare sector came into sharper focus as the world grappled with spikes in COVID-19 cases.

Big tech stocks cemented their dominance as more people work from home during the pandemic, shop and transact online, and tune into streaming services via their TVs and electronic devices.  The Nasdaq 100 Index is home to the likes of Apple, Google, Amazon, Microsoft, Facebook and Chinese heavyweights Tencent (owner of the WeChat messaging and payment app) and Alibaba (the Chinese Amazon).  

The 20 most popular ETFs invested in by SMSFs

The top 20 list below is ranked by the percentage of SMSFs holding these ETFs, rather than the percentage each security makes up of total SMSF investments, although both figures are provided in the table.

20 most popular ETFs invested in by SMSFs

The top 20 list below is ranked by the percentage of SMSFs holding these ETFs, rather than the percentage each security makes up of total SMSF investments, although both figures are provided in the table.

RankSecurity codeETF name% of Funds with Domestic Listed Securities that hold this security% of total SMSF Domestic Listed Securities Investments*
1VASVanguard Australian Shares Index Etf16.4%10.4%
2VAPVanguard Australian Property Securities Index Etf15.0%3.4%
3IVVIshares S&p 500 Etf11.4%4.7%
4IOOIshares Global 100 Etf10.9%4.1%
5VGSVanguard Msci Index International Shares Etf9.9%3.8%
6VEUVanguard All-world Ex-us Shares Index Etf9.4%3.0%
7STWSpdr S&p/asx 200 Fund9.2%5.6%
8VHYVanguard Australian Shares High Yield Etf9.1%4.3%
9VAFVanguard Australian Fixed Interest Index Etf8.5%3.7%
10VTSVanguard Us Total Market Shares Index Etf8.3%3.5%
11IXJIshares Global Healthcare Etf7.0%1.8%
12NDQBetashares Nasdaq 100 Etf6.8%1.8%
13QUALVaneck Vectors Msci World Ex Australia Quality Etf6.1%2.1%
14MVWVaneck Vectors Australian Equal Weight Etf6.0%1.8%
15VGADVanguard Msci Index International Shares (hedged) Etf5.8%2.3%
16IEMIshares Msci Emerging Markets Etf5.8%1.1%
17SLFSpdr S&p/asx 200 Listed Property Fund5.4%1.1%
18IAFIshares Core Composite Bond Etf4.6%1.5%
19IAAIshares Asia 50 Etf4.1%1.0%
20DJRESpdr Dow Jones Global Real Estate Fund4.1%0.6%

Source: BGL (bglcorp.com.au). Data as of 30 June 2020

**Percentage each security makes up of the total SMSF ETF investments e.g. VAS is 10.4% of the total SMSF investments in ETFs.

It’s worth noting that just five companies provide the ETFs in the top 20, and four companies (Vanguard, iShares, SPDR and BetaShares) have 18 of the top 20.

Outside the top 20, SMSFs are also diversifying into emerging trends including infrastructure, cybersecurity, gold and sustainability. Infrastructure is valued as a stable, long-term income investment. Cybersecurity is increasingly recognised as individuals, companies and governments grapple with online attacks. Gold prices surged early in 2020 as investors flocked to traditional safe haven investments, while growing numbers of investors concerned about the environment, sustainability and governance issues are backing sustainable investment options.  

Learn more about SMSF assets in the following SuperGuide articles:

SMSF investment: 20 most popular managed funds

SMSF investment: 20 most popular managed funds

November 16, 2020

SMSF investment: 20 most popular Australian shares

SMSF investment: 20 most popular Australian shares

November 16, 2020

SMSF investment: 20 most popular international shares

SMSF investment: 20 most popular international shares

November 16, 2020

Which asset classes are popular with SMSFs?

Which asset classes are popular with SMSFs?

April 4, 2019

SMSFs: Top 10 alternative investments

SMSFs: Top 10 alternative investments

January 22, 2019

Learn more about SMSF investment in the following SuperGuide articles:

The importance of asset allocation

The importance of asset allocation

February 10, 2021

SMSF investment rules: Collectables and personal use assets

SMSF investment rules: Collectables and personal use assets

October 15, 2020

What are the SMSF borrowing rules?

What are the SMSF borrowing rules?

August 6, 2020

How to create an SMSF investment strategy (including example documents)

How to create an SMSF investment strategy (including example documents)

August 6, 2020

How to achieve genuine diversification in an SMSF

How to achieve genuine diversification in an SMSF

August 3, 2020

How do SMSF retirees invest?

How do SMSF retirees invest?

March 14, 2020

10 steps to buying a commercial property and leasing it to your SMSF

10 steps to buying a commercial property and leasing it to your SMSF

February 12, 2020

What on earth is an in-specie transfer?

What on earth is an in-specie transfer?

January 15, 2020

How to invest in infrastructure through an SMSF

How to invest in infrastructure through an SMSF

October 1, 2019

ETFs: How do I use them and what do they cost?

ETFs: How do I use them and what do they cost?

June 19, 2019

SMSF guide to hedging

SMSF guide to hedging

May 1, 2019

SMSFs and property: A Super Guide

SMSFs and property: A Super Guide

April 5, 2019

The definitive SMSF guide to franked dividends

The definitive SMSF guide to franked dividends

April 2, 2019

SMSF investment rules: What every trustee should know

SMSF investment rules: What every trustee should know

February 15, 2019

Related topics

Most popular investments for SMSFs SMSF investing SMSFs

IMPORTANT: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

Reader Interactions

Comments

  1. Louise Harrison says

    March 8, 2019 at 12:16 pm

    This along with all the SuperGuide articles are incredibly useful thank you.
    Would also be useful to see a comparison of price, fees and return for top 30 ETF and LIC, also fixed interest trusts/ bonds. Keep up the Excellent work, & thanks!

    Reply

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All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

You should consider whether any information on SuperGuide is appropriate to you before acting on it.

If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

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