ETF usage ‘intensifying’ among advisers

Research conducted by fund provider VanEck, known as the 2025 VanEck Smart Beta Survey, has found that over the last year, there has been 70 per cent greater reported usage of exchange-traded funds (ETF) among advisers, with 65 per cent using two or more smart beta strategies.

“The depth of usage has also expanded to cover a broader range of asset classes, with Australian equities, global infrastructure and emerging markets the most popular asset classes among advisers adopting smart beta strategies,” VanEck said.

The survey also revealed that more than half of advisers (50.13 per cent) had replaced market cap/passive exposures in client portfolios with smart beta, an increase of 10.77 per cent since 2022. Moreover, a further 61.27 per cent had done the same with active funds.

Of advisers surveyed, VanEck stated that one in four are currently investing some of their personal portfolios in cryptocurrency, but only 16 per cent are using it as an investment tool for their clients, with bitcoin remaining the most popular digital asset for advisers.

Private markets have seen larger popularity, with the research finding that 60 per cent of financial advisers currently allocate to the asset class, with “single private market funds and listed vehicles being the most popular way to gain exposure”.

However, nearly two-thirds of respondents said they are not planning to increase their allocation to private markets over the next three years.

At least half of all respondents currently utilise an SMA/managed account, with most citing investment track record and credibility as the two most important factors.

VanEck Asia-Pacific chief executive and managing director Arian Neiron is particularly optimistic about the role ETFs will play in the future of financial advice.

“One thing is clear from 10 years’ worth of survey data: ETFs have become an indispensable tool for advisers targeting cost-efficient outcomes,” Neiron said.

“Penetration is effectively universal at 96.41 per cent. We see smart beta tracking the same arc, with adoption lifting from 36.81 per cent in 2016 to 47.85 per cent in 2025.”

He added that the smart beta switch has also been reflected in net flows.

“In 2023, only two months cleared $500 million. Last year, this surged to nine months, with four months crossing the $1 billion threshold for the first time,” Neiron said.

“This year has been softer with the broader markets pullback, however six out of eight months still topped $500 million, and July set a new all-time high of $1.1 billion.