Exchange traded funds: why are they relevant to your portfolio?
A well-diversified portfolio can help investors reduce risk and gain more consistent returns over the long-term. Asset allocation is key to diversification and, given the diverse range of asset classes and investing strategies offered by ETFs, they can play an important role in helping build a well-balanced portfolio.
A growing number of investing options
The ETF industry has spiked 16% to $42.1bn in 2018 with a growth rate of 68% p.a. over two years. The industry has been growing at a robust rate of 20% annually. Data from both VanEck and BetaShares shows that the net inflows of funds into ETFs in January 2019 was the highest January intake on record. Since recommendations after the banking Royal Commission, a greater adoption of ETFs is anticipated in 2019. The growth in the industry has seen the number of options for investors increase significantly with ETFs covering a broad range of Australian share investing strategies and other asset classes such as international shares, infrastructure, commodities and fixed income.
What are the advantages of ETFs?
ETFs generally come at a lower cost than managed funds, offer market liquidity, can be used for risk management and provide the ability to build a well-diversified portfolio with just a few trades.
What are the risks and how can these be mitigated?
As with all investments there are risks and by joining us at Building a well-balanced portfolio – the role of ETFs you will learn how to assess ETFs for risks and benefits, as well as how to select and, importantly, achieve portfolio diversification.
We’ll cover tracking errors, timing, buy-sell spreads, market liquidity, currency risk and more.
Walk away with more knowledge to become a better investor.
MEL 15 March | BNE 20 March | SYD 22 March | PER 29 March