A Hunger For ETF Knowledge

By Robin Bowerman | More Articles by Robin Bowerman

Given the rapid growth in the popularity and market capitalisation of Exchange Traded Funds (ETFs), it is hardly surprising that an Investment Trends report describes investors as "hungry" to learn more about the products.

The researchers attribute the demand for more information about ETFs – including for comparisons of ETFs, performance of ETFs, cost of ETFs and comparisons of ETFs with other types of investment products – to the "surge" in new ETF investors.

Investment Trends surveyed more than 12,000 investors and more than 760 financial planners between September and October for its latest ETF report.

This thirst for ETF knowledge is another confirmation that advisers who are highly informed about ETFs should be well placed to meet one of the key needs of increasing numbers of investors.

As Smart Investing recently discussed – Plenty to celebrate on an ETF anniversary – the market capitalisation of Australian-listed exchange traded products grew by more than 60 per cent to $16.98 billion over the 12 months to February 28. (The vast majority of exchange traded products are ETFs.)

Key findings in the latest ETF report from Investment Trends include:

  • 192,000 Australian investors plan to make an ETF investment within 12 months of being surveyed – up 29 per cent on the previous year’s intentions to invest in EFTs. These figures cover existing ETF investors planning to reinvest and intending first-time ETF investors. However, as the researchers say, "not all will act on this intention".
  • A further 19 per cent of financial planners say they may begin to recommend ETFs for the first time within 12 months of being surveyed.
  • Investors’ five main reasons for investing in ETFs include diversification, low cost, access to overseas markets, avoidance of individual stock risl and liquidity/ease of buying and selling. The use of ETFs to provide a good core for a portfolio also ranked high among the main reasons for using the products.

The main reasons why investors are turning to ETFs reflect some of the fundamental principles of sound investment practice including, diversifying a portfolio to spread risks and opportunities while keeping investment costs to a minimum.


Robin Bowerman is Head of Market Strategy and Communication, Vanguard Australia.

As a renowned market commentator and editor Robin has spent more than two decades writing about all things investment.


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About Robin Bowerman

Robin Bowerman is Head of Market Strategy and Communication, Vanguard Australia. As a renowned market commentator and editor Robin has spent more than two decades writing about all things investment.

View more articles by Robin Bowerman →