A growing number of SMSF trustees are switching to ETFs

By Vanguard

ETFs

Over half of self managed super fund trustees now hold at least one ETF

A growing number of self managed super fund (SMSF) trustees are using exchange traded funds (ETFs) in their investment portfolio, primarily to tap into international and Australian shares.

Research for the 2025 Vanguard/Investment Trends Self Managed Super Fund (SMSF) Report found that 51% of SMSFs (315,000 funds) currently hold one or more ETF products in their fund, which is up from 265,000 funds in 2024.

At the same time, around 30% of SMSF trustees responded that they also invest in ETFs outside of their superannuation.

And the average portfolio allocation to ETFs by SMSFs has more than doubled over the last two years from 5% in 2023 to 12% this year.

That number is likely to continue to rise, with 230,000 SMSFs having indicated in the report they expect to reinvest in ETFs over the next 12 months, and a further 65,000 having noted they plan to make their first ETF investment over the same period.

The uptake of ETFs has been particularly strong among newly established SMSFs (61% use), comprising 31% of those portfolios.

Why are SMSFs using ETFs?

The primary reasons SMSF trustees say they are using ETFs are as follows:

Diversification	68%
Get exposure to specific overseas markets	55%
Liquidity/easy to buy and sell	48%
Saves me time from choosing individual stocks	42%
Provide good portfolio core	41%
Access to specific types of investments/asset classes	38%
Competitively priced	29%
Available on my preferred investing platform	24%
Transparency	13%

^Source:^{2025 Vanguard/Investment Trends SMSF Report}

For those trustees intending to use ETFs in the future, the primary reasons are fairly similar.

They include saving time (50%), diversification (45%), gaining exposure to overseas markets (33%), and access to specific types of investments and asset classes (32%).

How are SMSFs using ETFs?

In terms of how SMSF trustees are allocating their capital to ETFs within their fund, the biggest asset class exposures are international shares (40%), Australian shares (31%), followed by Australian fixed income (8%), Australian listed property (4%), and cryptocurrency (4%).

Outside of their SMSF, trustees said they had 39% allocated to international shares, 34% to Australian shares, 9% to Australian fixed income, and 4% to Australian listed property.

Australian Securities Exchange (ASX) and Vanguard data shows ETFs investing in international shares continued to gain the biggest investor inflows in April, capturing $1.95 billion in investments – around 43% of the total ETF inflows.

ETFs investing in Australian shares captured $1.69 billion of investor inflows, equal to 37% of total ETF inflows.

About the report

Vanguard has partnered with Investment Trends to release the SMSF Trustee report for 12 years. The 2025 report surveyed more than 1,500 SMSF trustees and offers the most comprehensive analysis of this growing sector of the Australian superannuation system, with an ongoing objective of growing the industry’s understanding of this important segment of Australia’s superannuation industry.

^{Important Information}

^{Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (“Vanguard”) is the issuer of the Vanguard® Australian ETFs. Vanguard ETFs will only be issued to Authorised Participants. That is, persons who have entered into an Authorised Participant Agreement with Vanguard (“Eligible Investors”). Retail investors can transact in Vanguard ETFs through Vanguard Personal Investor, a stockbroker or financial adviser on the secondary market.}

^{We have not taken your objectives, financial situation or needs into account when preparing this publication so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for Vanguard’s products before making any investment decision. Before you make any financial decision regarding Vanguard’s products you should seek professional advice from a suitably qualified adviser. . The Target Market Determination (TMD) for Vanguard’s ETFs include a description of who the ETF is appropriate for. You can access our IDPS Guide, PDSs Prospectus and TMD at vanguard.com.au or by calling 1300 655 101.}