Australian shares are the most popular of all on-exchange investments, however, an Australian Securities Exchange (ASX) study finds that 20% of investors are embracing the convenience of Exchange Traded Funds (ETFs).
According to the ASX Australian Investor Study 2023, this is 5% higher than in 2020 as the popularity of ETFs continues, given their ability to provide investors with exposure to a wide range of companies, regions, asset classes and strategies, making it easier to diversify.
The study report shows slightly more investors (16% in 2023 compared to 15% in 2020) are investing directly in international shares. The report suggests this can enable investors to further diversify their holdings, benefit from different regional economic cycles and gain exposure to a wider range of companies and sectors than is available in Australian markets.
In 2023, the ASX study found that 16% of investors were investing directly in international shares, which is a slight increase compared to 15% in 2020.
Meanwhile, fewer investors are holding residential properties (down from 39% in 2020 to 35% in 2023), with other investments such as term deposits and commercial property also seeing small drops since 2020.
In the Australian Investor Study 2023, it was found that out of 20.4 million Aussie adults, 51% hold investments outside of their home and superannuation.
While 20% of Australian investors are involved in ETFs, 14% of new investors ventured into ETFs as their first investment.
Given the widespread embracing of ETFs, Saxo Bank, parent of the wholly owned subsidiary Saxo Australia, has launched its revamped SaxoInvestor app, helping investors around the world when building a globally diversified portfolio for the long term.
Saxo says an ETF is an instrument traded like an equity, giving exposure to a broad basket of instruments, such as equities or bonds. With an ETF, investors can get a broad exposure to a collection of financial assets through a single instrument.
Saxo’s upgraded app, which is built upon the feedback from its 1.2 million clients around the world, enables diversification across stocks, ETFs, and bonds from more than 30 global markets.
Commenting on the app, Saxo COO Stig Christensen highlights how the fintech firm remains focused on facilitating curious investors to build a globally diversified portfolio.
“Because we know that, over the long term, that’s the only way to create wealth, ride out market volatility, and prosper,” Christensen says.
“We know that about 60% of client interactions with Saxo occur via mobile, so we couldn’t be happier to unveil the upgraded SaxoInvestor app for our digitally-savvy investors.”
Saxo’s app includes a new menu structure and enhanced navigation tools, updated, user-friendly product pages for stocks, ETFs, and bonds, a revamped news hub for market research, and a fresh portfolio tab to track investment and watchlists.
Saxo app-users will still be able to access more than 35,000 equities, ETFs, and bonds across more than 30 global markets and access brokerage with US stocks from just US$1 ($1.51).
Saxo Australia CEO Adam Smith says Australian investors can access more than 72,000 financial instruments across three platforms.
“They can trade across all major asset classes, from stocks to bonds, FX, options, futures, CFDs and across more than 50 global exchanges,” he previously told this news service.
“They can also use Saxo’s platform offering to manage their self-managed superannuation funds or trusts.”
ETFs provide investors with exposure to a diverse range of companies, regions, asset classes, and strategies. The ASX says it is considered one of the most affordable ways to enter the investment market and diversify holdings.
The ASX says ETF investors are more likely to be seeking diversification opportunities, looking for a balance between risk and return, and aim to maximise their capital growth or secure a sustainable income stream.
The study also finds the two biggest challenges investors experience is knowing which sources of investment to trust and what investments to choose.
Saxo Bank is a Danish investment bank that specialises in online trading and investment.
Write to Aaliyah Rogan at Mining.com.au
Images: Unsplash & Saxo
