The growth of assets under management in the Australian exchange-traded funds (ETF) market has exploded over the past three years to around $125 billion. ETFs enable investors to gain exposure to a wide range of assets at relatively low cost and generally replicate their investment benchmarks closely.

With over 270 listed on the ASX, how do you choose in which to invest? For most retail investors the main choice comes down to Australian based or international?

When it comes to Australian based ETFs there are 4 which stand out -

• Vanguard’s Australian High Yield ETF (VHY) has a 3 year return of 9.1% pa with a 32% return over the past year.
• Blackrock’s iShares ASX 20 ETF (ILC) earned a return of 9.8% pa over the past 3 years including 32.9% over the last 12 months.
• VanEck’s Australian Sustainable Equity ETF (GRNV) achieved a 3-year return of 11.5% pa and a one-year return of 25.7%
• State Street SPDR ASX 50 ETF (SFY) returned 9.3% pa for 3 years and 27.6% for the last year.

For the International based ETFs, three ETFs caught our attention in sectors not well covered by Australian investments –

• Morningstar’s Global Technology ETF (TECH) with 3 year return of 24% pa achieved 30.8% for the past year.
• BetaShares’ Cybersecurity ETF (HACK) earned 22% pa over 3 years and 43.8% over the last 12 months.
• On the Global Sustainability front, BetaShares ETHI ETF returned 24.4% pa over 3 years and a staggering 32.8% over the last year.

Would your portfolio benefit from including such ETFs? We always advise you to look before you leap when it comes to investing and to know what you are investing in. Spend four hours with us at the Virtual Investment Forum on 23 November  to learn all you need to know about investing in ETFs.

Morningstar publishes a monthly report on the Australian Listed Investment Companies sector (LICs) listing 96 LICs with a total market capitalisation of $60 billion. LICs have proved very popular with retirees due to their steady dividend policies and diversification benefits.

LICs come in different shapes and sizes and cover various sectors ranging from Australian Foundation Investment Company at $10 billion covering major Australian shares through to NAOS Absolute Opportunities Company Limited at $58 million operating in the micro-cap space. What all these companies have in common is a desire to pay good dividends to shareholders?

Some LICs like Magellan Global Fund provide international exposure while others have a specialist mandate such as Perpetual Credit Income Trust. The great advantage of LICs is they are listed so the liquidity is there if you need to raise cash in a hurry. 

Find out more about this interesting and varied sector join us on 25 November for half a day and see if you can find the LIC to plug any holes in your investment portfolio.