By now, you know that ASX Exchange Traded Funds (ETFs) are changing the world. There are nearly 200 on the ASX and thousands more globally.
While studies vary, I’m lead to believe between 15% and 20% of all share trading in Australia throughout 2018 was conducted by unlisted, passive index funds and ASX ETFs.
How I Use ETFs & What I Look For
Why are they growing so quickly?
To me, there are seemingly countless reasons why ETFs are more than just a fad and the number of them is growing rapidly:
- They work. Not all ETFs are created equal, but, so far, the industry has broadly delivered on what it promised.
- They’re transparent. Due to strict disclosure obligations, Australian ETFs are very transparent — that’s more than can be said of many active funds!
- Typically, they’re low cost. There are many share and bond ETFs on the ASX that have a management expense ratio (aka a yearly fee) of less than 0.5%.
- It’s simple to invest. With a normal sharebroking account, Aussies can invest in an ETF. Depending on the ETF, it could give them exposure to shares, bonds, currencies… with just a few clicks!
- They can be used with individual shares. As I explain below, ETFs can be used to grow a portfolio from scratch, alongside other investments (e.g. individual shares) or in their own right. For example, I combine my favourite small caps and tech stocks with ETFs.
So what’s the catch?
Of course, there are plenty of risks to ETF investing.
The level of risk will depend on many different aspects of the ETF you choose to invest in, including its size, strategy, the ETF issuer, investment process, regulation… the list goes on.
In the following short video (3:30 min), I explain why I’m buying ASX ETFs and how I blend them with my active “high conviction” share ideas.
To learn more about how we pick and choose ETFs, access our free report below.
NEW! Our #1 ASX ETF of 2019
Exchange-Traded Funds (ETFs) are changing the world of investing. But with so many on the ASX, it's hard to know which ETF will be a top performer in 2019.
Every financial Tom, Dick and Harry seems to 'launching' (read: flogging) an ETF to investors. In our humble opinion, most of them could be a waste of time - and money. Worse, many of them could fail!
Here's the best part: we're willing to release the name and ASX ticker code of the ETF we've identified as our #1 for 2019.
Just click here now to access our free "#1 ETF of 2019" report. No credit card details or payment required.
Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Owen Raszkiewicz does not have a financial interest in any of the products or companies mentioned.