More young Australians are investing in Exchange Traded Funds

Alison Banney 8 March 2017 NEWS

young guy ASX 738

The average age of Exchange Traded Fund investors has dropped by 20 years since 2011.

The Australian Exchange Traded Fund (ETF) industry has grown by 31% in one year alone, with 265,000 active investors up from 202,000 the previous year, according to the BetaShares/Investment Trends ETF report released today.

Furthermore, the report projects that a record number of 315,000 investors intend to make an ETF investment in the next 12 months.

ETFs are no longer only popular among retirees; the average age of those who began investing in ETFs in the past year is 39, down from 58 only five years ago.

Interestingly, over one third (37%) of online platform investors who currently use or intend to use ETFs in the coming year are millennials.

ETFs own a range of assets, such as shares, bonds and foreign currency, and divide ownership of these into shares, which then trade like a common stock on a stock exchange.

The report revealed 43% of Australia's financial planners currently advise on EFTs, citing low cost and diversification as the top benefits.

BetaShares managing director Alex Vynokur says, “No longer a niche investment vehicle, ETFs now provide low-cost, liquid and transparent access to a diverse range of asset classes and exposures.”

“In line with the growth we are currently seeing, we project the industry will hit $30-$33 billion in funds under management, with approximately 250 exchange traded products, by the end of 2017,” said Vynokur.

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