Exchange Traded Funds or ETFs, are an investment fund, similar to a managed fund, traded on the stock market, similar to stocks. Most ETFs track an index such as a stock index or a bond index.

Whilst many investors have moved away from managed funds to direct shares in their self managed superannuation fund in order to take more control to align or correlate the superannuation investment strategy with their individual circumstances, this has meant that many SMSF investors are overweight in Australian Shares.

Unlike Australian Shares, most trustees feel uncomfortable selecting direct overseas shares such as Facebook, Microsoft, IBM, Target, Visa etc. Rather than investing in Managed Funds that invest in overseas markets, Trustees are considering ETFs that mirror an overseas market index. The advantage of the ETF is that the fees and charges are normally less than an equivalent managed fund.

With the decline in the $A from $US1.05 twelve months ago to $US0.73 at the time of writing many trustees have seen substantial growth in the performance of their overseas ETFs when compared to the performance of the Australian Share market.

For more information on Exchange Traded Funds (ETFs) and how they can help your investment portfolio grow contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.

The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.

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