Direct investment popularity continues
Direct investment activity has continued to increase thanks to the growth of self-managed superannuation funds (SMSF), according to research by Lonsec.
The analysis found a significant growth in the number of investments catering to direct investors.
"Given the average SMSF has almost a third of its assets invested in Australian shares, it's logical there should be a strong increase in the type of products aimed at these investors," Lonsec senior investment analyst, Peter Green, said.
"This surge of interest has seen a sustained rise in new listed investment companies (LIC), exchange traded funds (ETFs), and separately managed accounts (SMAs), primarily driven by greater demand from direct investors."
Green said there has been an increase of initial public offerings for LICs thanks to strong returns from the Australian market and renewed interest in direct investing.
Commenting on SMAs Green said they are one of the fastest growing direct investment products.
"They are basically the next evolution of trading platform, which share some of the benefits of a master trust yet allow investors to by-pass the managed fund structure and own the portfolio directly in their own name," he said.
Green said the rapid ETF expansion would follow the same trend as seen in the US with further expansion and growth. Currently, the sector has $16 billion in funds under management.
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