Exchange-traded funds have become a fixture in self-managed super fund portfolios, but the label covers a huge range of products, from broad global Index Funds to narrow single-sector plays. Knowing that ETFs are popular is only half the story; the more revealing question is which kinds of ETFs trustees are actually buying. The latest benchmark data points to a clear answer, and it says something interesting about how SMSF investors are trying to reshape portfolios that have long been concentrated at home. This article looks at which categories are drawing the interest, and why.

International equities lead the way

The standout category is international equities. In the benchmark data, the majority of the ten most widely held ETFs provide exposure to global rather than domestic shares. That is a striking pattern in a sector famous for staying close to home, and it suggests trustees are using ETFs deliberately to reach markets beyond the ASX.

The logic is intuitive. Buying international shares directly is fiddly and expensive for an individual trustee, involving foreign exchanges, currency and unfamiliar reporting. A single global Equity ETF solves all of that in one ASX trade, delivering exposure to hundreds or thousands of overseas companies. For a fund whose direct holdings are dominated by Australian banks and miners, that is an efficient way to diversify.

It also reflects a growing awareness of home bias. Australia is a small slice of the global share market, yet many SMSFs hold almost entirely domestic equities. International ETFs are the most popular tool trustees are reaching for to correct that imbalance.

Broad-market and index funds

Within the international and domestic categories, the interest concentrates on broad, low-cost index funds rather than narrow or exotic products. Trustees gravitate to funds that track a whole market or a large index, prizing Diversification and low fees over the promise of picking a winning theme.

This preference for breadth is consistent with how many trustees think: they want a simple, diversified core they can hold for the long term without constant monitoring. Broad index ETFs, whether global or Australian, suit that mindset and form the backbone of most SMSF ETF holdings.

Australian equity ETFs

Domestic equity ETFs remain popular too, often used to complement or simplify a trustee's direct Australian share holdings. Some trustees use an Australian shares ETF as a diversified base and hold a handful of individual companies alongside it for conviction or franked income.

Franking is part of the appeal here. Australian equity ETFs can pass through franking credits, which many SMSF trustees, particularly those in or near retirement, value highly. That keeps domestic ETFs relevant even as international exposure grows, because they serve a different purpose in the portfolio.

Fixed income and diversified options

Beyond equities, interest extends to fixed income and diversified multi-asset ETFs, though from a smaller base. Bond ETFs offer access to a market that is otherwise hard for individuals to reach, while diversified ETFs bundle shares, bonds and sometimes property into a single ready-made portfolio.

These categories tend to attract trustees seeking income, stability or a genuinely hands-off option. A diversified ETF can function almost as a complete portfolio in one line, which appeals to funds that want simplicity. They are not yet as widely held as equity ETFs, but they round out the menu trustees are exploring.

What the categories reveal

Taken together, the category mix tells a coherent story. SMSF investors are using ETFs primarily to diversify, and above all to add the international exposure their direct portfolios lack. The interest sits in broad, low-cost building blocks rather than speculative niches, which is reassuring given how central these funds can become to a portfolio.

It is a measured evolution rather than a revolution. ETFs remain a minority of total SMSF assets, and the categories drawing interest are the sensible, diversified ones. That pattern suggests trustees are treating ETFs as long-term portfolio tools, not as vehicles for chasing the latest fashionable sector.

The data also carries the usual caveat: it reflects funds on one large administration platform rather than every SMSF, so it indicates direction and relative popularity rather than exact national shares.

How to think about category choice

For a Trustee weighing which ETF category fits their fund, the useful questions are about role rather than popularity. Is the aim to correct a home bias, in which case international equity exposure is the obvious gap? Is it to add income, which might point to franked domestic funds or fixed income? Or is it simplicity, where a diversified fund does much of the work?

Whatever the category, the same discipline applies: understand what the ETF holds, how it is structured and taxed, and how it fits the fund's documented Investment strategy. Popularity is a starting point for research, not a recommendation. This article is general information only and is not advice to buy any particular ETF or category.

It is also worth noting how quickly the ETF menu itself is evolving, because the categories drawing interest today may not be the ones that dominate in a few years. Product issuers keep launching new funds, including active ETFs that package a manager's stock-picking in a listed wrapper, thematic funds tied to particular industries, and currency-hedged versions of popular global indices. The breadth is a benefit, but it also raises the importance of looking past the label to what a fund actually holds and how it behaves in different conditions.

For trustees, the sheer number of Options is a reason to anchor decisions in the fund's strategy rather than in whatever is being marketed most heavily at the time. A broad, low-cost international index fund and a narrow single-sector product may both wear the ETF badge, yet they play completely different roles and carry very different risks. The category data is most useful as a map of what other trustees have found genuinely useful, which tends to be the diversified building blocks rather than the specialised bets.

Practical takeaway

The ETF categories drawing the most SMSF interest are international equities above all, followed by broad domestic index funds, with franked Australian equity ETFs and, from a smaller base, fixed income and diversified options rounding out the picture. The common thread is diversification and correcting home bias through low-cost, broad building blocks rather than speculative themes. Trustees should choose a category by the role it plays in their strategy, understand the product, and remember the data reflects one platform, not every fund.