Investment choices: Exchange Traded Fund (ETF)

What is an Exchange Traded Funds

An Exchange Traded Fund (ETF) is an investment fund traded on stock exchanges, much like shares. An ETF can hold assets such as shares, commodities or bonds. ETFs usually track the performance of an index, giving investors access to an instantly diversified portfolio. ETFs are open-ended funds, meaning investors have the flexibility to buy or sell shares at any time. The premise of an ETF is that you are buying into a selection of companies in one hit, rather than individually picking each company to invest in. The value of your investment is driven by the underlying asset value and general market sentiment.

What are the advantages of ETFs?

ETFs can be managed as a passive investment, which is cost effective and your returns will more than likely match the market. Alternatively using ETFs as part of an actively managed portfolio can assist with reducing costs and enhancing portfolio diversification. Finally ETFs are a good way to gain exposure to international shares and foreign currencies. For an investor looking to avoid volatility, the risk from currency movements needs to be understood before proceeding with an ETF. You should speak to a financial adviser to ensure your investment portfolio suits your requirements.

General Advice Warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

 

Recent Articles

Update on Drought Assistance

16th August 2019

RAA – Rural Assistance Authority https://raa.nsw.gov.au Farm Innovation Fund The Farm Innovation Fund is part of the NSW Government’s Drought Strategy and... Read More

Planning Opportunity - Carry forward (Catch-up) Concessional Contributions

08th July 2019

From 1 July 2018, individuals with total superannuation balances below $500,000 have been allowed to carry forward the unused... Read More

1 July 2019 Retail and Industry Fund Insurance Changes

25th June 2019

From 1 July 2019, the Protecting Your Super reforms will commence. It’s important to understand how these changes will... Read More

Important ATO changes to payroll procedures

25th June 2019

Single Touch Payroll (STP) is an ATO reporting obligation which requires employers to report employee payroll information, including superannuation,... Read More