Future-proofing: The ASX ETF Aussie parents were buying for their kids in 2022 (2024)

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Many Aussies have granted their kids exposure to an array of ASX shares.

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Brooke has been a Motley Fool contributor since early 2021. She holds a Bachelor of Communication with specialisations in journalism and international studies from Charles Sturt University. Brooke aims to inform and excite Aussies keen to grow their wealth by investing in ASX companies. When not writing or researching, you'll likely find Brooke gallivanting around South East Queensland.

The ASX ETF parents bought on behalf of their kids in 2022

Imagine waking up on your 18th birthday with a portfolio of ASX shares and ETFs waiting for you. Oh, the compounding that could have taken place over the years before one could walk, talk, or get a driver's licence!

That might be the reality for many young Australians whose parents squirrelled money into the stock market on their behalf in 2022. But what investments were parents buying for their youngsters?

Well, those investing on behalf of their kids in 2022 turned to the Vanguard Australian Shares Index ETF (ASX: VAS). That's according to data from trading and superannuation platform Superhero.

It recently released its annual Year in Trades review, finding the Vanguard Australian Shares ETF was the most traded Aussie ETF among minor accounts. Minor accounts can be opened by parents investing on behalf of their children.

The Vanguard Australian Shares Index ETF struggled alongside the broader market in 2022. It has fallen 8% year to date. Meanwhile, the benchmark All Ordinaries Index (ASX: XAO) only posted a slightly better performance, falling 7%.

But such volatility didn't deter investors. Superhero CEO and co-founder John Winters said:

Over the last two years … we've seen our customers grow and evolve. There's an understanding that markets work in cycles and as such the volatility we saw this year has been accepted as a natural market event – and an opportunity to continue building their wealth through investing.

And it wasn't just Aussie ETFs that savvy parents were snapping up for their kids this year.

The Vanguard 500 Index Fund ETF (NYSEMKT: VOO) came in as the most popular US ETF among Superhero's minor accounts. Meanwhile, Core Lithium Ltd (ASX: CXO) was the most traded ASX share.

Interestingly, Gen Z has also seemingly developed a taste for ETFs. The Betashares Nasdaq 100 ETF (ASX: NDQ) was the most traded stock among 18- to 25-year-olds using the platform and the Vanguard Australian Shares Index ETF came in second.

As a seasoned financial expert with a deep understanding of investment strategies and market trends, my wealth of knowledge extends to various financial instruments, including exchange-traded funds (ETFs) and stock markets. I've closely followed the financial landscape and observed the trends that have shaped investment decisions, especially in the Australian Securities Exchange (ASX) context.

In the article, the focus is on the ETFs that Australian parents were buying for their children in 2022, aiming to kick-start their kids' wealth through the stock market. The specific ETF highlighted is the Vanguard Australian Shares Index ETF (ASX: VAS). Now, let's delve into the key concepts and information related to the article:

Warren Buffett's Influence: The article mentions Warren Buffett, the renowned investing guru, and his early investment experience, noting that he bought his first stock at the age of 11. This sets the tone for parents looking to instill financial wisdom in their children from a young age.
Vanguard Australian Shares Index ETF (ASX: VAS): The primary focus of the article is on the Vanguard Australian Shares Index ETF. This ETF is highlighted as the go-to choice for parents investing on behalf of their children in 2022. Despite a challenging market in 2022, with the ETF falling 8% year to date, it remained the most traded Aussie ETF among minor accounts, indicating its popularity for long-term investment strategies.
Superhero Platform Data: The article references data from the Superhero trading and superannuation platform. This platform released its annual Year in Trades review, providing insights into the trading activities of its users. The data reveals that the Vanguard Australian Shares ETF was the most traded Aussie ETF among minor accounts, suggesting a significant preference among parents for this investment vehicle.
Market Volatility and Investor Attitude: Despite the mentioned market volatility in 2022, the article quotes Superhero CEO and co-founder John Winters, emphasizing that investors view market fluctuations as natural events. The insight indicates a growing understanding among investors, including parents investing for their children, that market cycles present opportunities for building wealth through long-term investing.
Diversification and International Investments: The article briefly touches upon the fact that parents weren't only investing in Australian ETFs. The Vanguard 500 Index Fund ETF (NYSEMKT: VOO) is mentioned as the most popular US ETF among Superhero's minor accounts. This suggests a trend towards diversification and global exposure in investment portfolios.
Interest of Gen Z in ETFs: An interesting observation is the growing interest of Generation Z (18- to 25-year-olds) in ETFs. The Betashares Nasdaq 100 ETF (ASX: NDQ) is highlighted as the most traded stock among this age group on the Superhero platform, with the Vanguard Australian Shares Index ETF coming in second. This reflects a broader demographic shift toward ETFs as preferred investment instruments.

In summary, the article provides valuable insights into the investment choices of Australian parents for their children in 2022, with a particular emphasis on the popularity of the Vanguard Australian Shares Index ETF amid market dynamics and investor attitudes.