Skip to main content

Gearing into growth on the ASX

1 July 2015 |Investment strategy
Learn how unlocking the value of your investment portfolio using a margin loan can help build wealth and achieve your financial goals on a chart background.

Gearing into growth on the ASX

1 July 2015 |Investment strategy

Exchange Traded Funds (ETFs) are one of the fastest-growing products in the investment world, for good reason. ETFs offer in one listed stock instant access to the ‘beta’ (market performance) of a range of different asset classes, market indices, portfolios and strategies. They are cheap and flexible products that give individual investors a simple means of diversifying their portfolio.

In the United States, a record $243 billion poured into equity ETFs in 2014. Currently about US$20 billion a month flows into equity ETFs, although that flow did drop to a $2.7 billion trickle in August – down from $23 billion in July – as the China correction hit the markets.

In Australia, the ETF sector has grown from a $48 million initial listing of three funds in 2001 to a $19 billion sector offering 127 funds.

Get exposure to global growth

In particular, Australian investors have used international ETFs to gain access to international equities, both US and non-US, to get exposure to global growth. With one stock trade they can establish international diversification. Investors can lock-in this exposure either in a broadly diversified way, or honing the exact exposure they want – for example, by buying developed-market, emerging-market, regional or single-country exposure.

An international ETF gives an investor instant diversification into part of the 98.2 per cent of the ‘investable’ stock market universe that is not in Australia. Also, the ETFs can pick up exposures that the Australian does not have, for example large-scale telecommunications suppliers, technology, or large-cap drug companies.

This information is correct as at 01 July 2015.

Related Topics

Connect with us

Bendigo and Adelaide Bank acknowledges Aboriginal and Torres Strait Islander peoples as the First Peoples of this nation and the Traditional Custodians of the land where we live, learn and work. We pay our respects to Elders past and present as it is their knowledge and experience that holds the key to the success of future generations.

Leveraged Equities Limited ABN 26 051 629 282 AFSL 360118
© Copyright 2024 Leveraged Equities Limited