Jarrod Purchase, General Manager of Marketing at SelfWealth
The increased popularity and inflows to ETFs has resulted in an avalanche of ETF launches over the last few years. Such is the growth of the ETF market that in June this year it surpassed $50bn, growing 30% year-on-year. Industry insiders are forecasting the market may even reach $100bn by 2022.
So, which ETFs are Investors Buying?
In the last six months, over 134,000 trades were made on the SelfWealth platform. Many of them have been for popular stocks like AfterPay (ASX:APT) as well as the classics: Telstra (ASX:TLS) and the Big Four banks. However, the top 10 most traded ETFs, on the platform, alone represented 10% of all trades. Here’s the list:
The Top 10 ETFs Traded in the Last Six Months on SelfWealth
|1.||Vanguard Australian Shares Index ETF||VAS|
|2.||BetaShares Australian High Interest Cash ETF||AAA|
|3.||BetaShares Australian Equities Strong Bear Fund||BBOZ|
|4.||BetaShares Equities Strong Bear Fund||BBUS|
|5.||Vanguard MSCI Index International Shares ETF||VGS|
|6.||BlackRock iShares S&P 500 ETF||IVV|
|7.||Vanguard Diversified High Growth Index ETF||VDHG|
|8.||SPDR S&P/ASX 200 Fund||STW|
|9.||Vanguard U.S. Total Market Shares Index ETF||VTS|
|10.||BetaShares Australia 200 ETF||A200|
So, what to make of the top 10 ETF list?
Related article: Understanding Market Sentiment and How It Affects Asset Prices
Investors ‘short’ a stock, or the broader market when they expect the price of the corresponding asset to fall. This practice typically requires an investor to borrow the security from another market participant. However, with the aforementioned ETFs, you can invest directly in a security that offers exposure to a drop in the Australian or US share markets, respectively.
The Betashares Australian High Interest Cash ETF (ASX:AAA) is also a defensive move, proving popular in second position. The popularity of ETFs corresponds to a climate where interest rates are at an all-time low, leaving investors searching for a high-interest option.
International stocks remain a priority for many investors, with several ETFs such as VGS, IVV, VTS and even VDHG providing exposure to rising share markets overseas. Each of these securities also happen to be among the most actively traded ETFs on the platform.
Related article: Investing Overseas – Risks and Benefits
Finally, low cost funds are proving as popular as ever. While the BetaShares Australia 200 ETF has only been around a short time, it has gained significant traction to make it into the top 10. Meanwhile, stalwart VAS still tops the list. It is not only the most actively traded ETF, but also accounts for nearly as much value as the two ‘bear’ funds combined.
If you are interested in trading ETFs on the ASX it is easier than ever, all you need is a share trading platform.
The table below displays some of the International Broad Based ETFs available on our database with the highest three-year returns (sorted highest to lowest by three-year returns and then alphabetically by provider name). Use Canstar’s ETF comparison selector to view a wider range of products. Canstar may earn a fee for referrals.
Risks involved with ETFs
ETFs also have a number of risks to be aware of. These include market risk, liquidity risk and currency risk (particularly if you’ve invested in an international or global ETF). Check out this article on common investment risks to learn more. ETFs do not suit every investor, so before investing be sure to read the PDS, and if ever in doubt seek the help of a professional financial adviser.
Jarrod Purchase is the General Manager of Marketing at SelfWealth and has been with the company for over 18 months. His 10+ years of local and international marketing experience has helped SelfWealth become Australia’s fastest-growing online share trading platform, taking the challenge to large incumbents and providing immense value to Australian investors.