Exchange Traded Funds or ETFs are an investment that can be bought and sold on an exchange during trading hours just like ordinary shares. ETFs have become popular due to their ability to offer an investor a simple low-cost solution to access a basket of securities or commodities. They also offer a solution to achieve diversification rather than investing in individual stocks.
LOW COST: The reason for them being low cost is that they don’t have an active manager trying to outperform a benchmark as an Actively Managed Fund will have. An ETF will rather aim to mirror the performance of the asset or index such as Gold or Health care sector for example.
DIVERSIFIED: Through a single trade an investor is gaining exposure to numerous investments.
LIQUID: ETFs are traded on the Australian Securities Exchange (ASX) so can be bought and sold during the trading day.
SIMPLE: ETFs can offer a simple solution rather than individually assessing thousands of stock
options. Buying and selling units in ETFs is as simple as buying or selling any share on the Australian Securities Exchange.
TRANSPARENT: Easily see the value of your ETF investment through the stock exchange.
Speak to an SWM adviser to see if ETFs can add value to your wealth creation strategy.
The fee charged by an active manager can have significant impact to the overall performance of the
fund.