Nearly half of Australians prioritise social impact, willing to accept an average 2.62% lower return.
RIAA-certified responsible investments outperformed, averaging 13.20% returns over 10 years compared to 9.19%.
Greenwashing concerns persist for 52% of investors, though new ESG labelling aims to increase transparency.
7% of Aussies own ETFs, according to a survey of over 1,000 Australian adults from Finder's September 2022 Consumer Sentiment Tracker (CST). That's an estimated 1.45 million people and this figure is set to grow. ETFs are most popular among generation y and generation z.
ETFs (short for exchange traded funds) are popular as they allow investors to buy a basket of shares or assets in a single trade and generally offer low expense ratios. This allows retail investors to diversify within an asset class in a cost-effective way.
ETFs are most popular with generation Y (12%) and least popular with baby boomers (2%).
ETFs are more popular than managed or index funds in Australia.
There are 223 ETFs across 7 asset classes worth over AUD$113 billion in Australia (June 2021).
The growth of ETFs in Australia outpaced the global industry in 2021 with a 44% growth from AUD$95 billion to AUD$136.9 billion – its sharpest annual increase.
Who owns ETFs in Australia?
7% of Aussies own ETFs – an estimated 1.45 million people.
ETFs are most popular with generation Y (12%), followed by generation Z (8%).
Baby boomers are the least likely generation to hold ETFs (2%) and 6% of generation X own ETFs.
Men are more likely to own ETFs compared to women (8% vs 6%), but this is a much smaller investment gap than individual shares (24% vs 8%) and managed or index funds (9% compared to 3%).
Those in NSW are the most likely to own ETFs (9%), followed by QLD (8%), VIC (7%) and SA and WA (3% each).
ETFs' role in investment portfolios
Direct shares are still more popular than ETFs. 16% of Aussies own direct shares compared to 7% who have ETFs.
However, ETFs are now more popular than managed or index funds in Australia (7% compared to 6%) and are much more popular than listed investment companies (2%).
ETFs in Australia account for only 2% of investments by value, showing their appeal to those with limited capital as a vehicle for cost-effective diversification.
The median amount invested in an ETF is AUD$23,192.
The market capitalisation of ETFs has grown significantly.
The history of ETFs in Australia
In 2015, Australia opened up its market to actively managed ETFs, becoming one of the first regional markets to do so.
The ASX admitted the first 2 ETFs by State Street Global Advisors in 2001. It took another 6 years for the ASX to admit Blackrock iShares ETFs and another 2 for Vanguard to join the scene.
As of June 2021, there were 223 ETFs across 7 asset classes worth over $113 billion.
ETPs, financial instruments that track underlying securities or indexes and include ETFs, have grown significantly in the last 6 years. In January 2017, there were just 154 ETPs. As of July 2022, there are now 253 ETPs.
Thematic ETF strategies recorded strong growth in Australia last year accounting for 10 of the 33 new ETF launches in the country. However, thematic strategies account for just 3% of Australian ETF assets.
Global ETF statistics
There were just 276 ETFs globally in 2003, but as of 2021, there are more than 8,550.
ETFs worldwide were worth US$10 trillion in 2021.
ESG ETFs have grown significantly since 2006. They were worth US$5 billion and reached US$391 billion in 2021. The growth is primarily due to growth in Europe and the United States.
Susannah Binsted is the head of the Finder Awards program. Previously she was the head of public relations for the international division at Finder. Susannah has a Bachelor of Communication and a Bachelor of International Studies from the University of Technology Sydney.
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The best-performing ETF delivered a return of more than 101.22% over the last 12 months.
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