Chart of the Week: Investors allocate More to ETFs
The gap is narrowing as ETFs claim a larger share of Aussie portfolios.
This week’s insights come directly from Shani Jayamanne in “The State of the Australian Investor 2026″ report.
Direct shares still dominate portfolios but ETFs continue upward trend
The study, based on share sight data showed direct shares represented 51.5% of portfolio value in FY2026, down slightly from 51.9%. ETFs rose from 22.6% to 26.2%, a 3.6% percentage point increase.
Managed Funds fell from 8.2% to 6.7%, custom investments (unlisted or investments unsupported by Sharesight) dropped from 14.7% to 13.4%, while other investments marginally fell from 1.9% to 1.8%, and crypto from 0.6% to 0.4%. Portfolio ownership rates tell a similar story: 64.2% held ETFs, while 76.0% held direct shares.
The Aussie portfolio mix is changing
Assets under management in Australian ETFs continue to rise, currently standing at $377 billion at the end of the FY26. ETFs are easy to access, provide surface level diversification and can be used to gain exposure to asset classes that are difficult to access directly. This has made ETFs popular amongst newer investors who may not have the time or resources to compile their own portfolio of shares.
Across all portfolios (including those that hold no ETFs), the average number of individual ETF holdings increased from 2.26 to 2.45. Among investors who held at least one ETF, theaverage rose from 3.60 to 3.82. The share of portfolios holding an ETF increased from 62.7% to 64.2%.
The study found over the past two years, investors holding only ETFs increased from 21.7% to 23.6%. Investors holding only individual shares fell from 32.2% to 27.0%, while investors holding both increased from 44.7% to 48.1%. Mixed portfolios are more common but the role ETFs play in the average portfolio is increasing.
