Exchange Traded Funds (ETFs) offer an approach to investing that combines diversification with trading flexibility. This diversification can be across asset classes including Australian and international shares, bonds, property securities and commodities. There are also ETFs which provide exposure specifically to currencies and high-dividend shares.
Some ETFs seek to closely follow the returns (before fees and expenses) of a specific index like the S&P/ASX 200, S&P 500 or MSCI Emerging Markets. Likewise, Exchange Traded Commodities are designed to track the price of a specific commodity or a basket of commodities such as gold, oil, copper and corn.
There is over $3 trillion invested in ETFs globally, with many Australian investors finding new ways to use them to complement their current investment portfolio.
If your ETFs increase in value you may be able to realise a capital gain.
Many ETFs pay regular dividends, allowing you to generate an income stream. Some funds also provide franking credits along with their dividends, which can help reduce the income tax payable.
You can instantly diversify your portfolio across different asset classes and securities.
While ETFs offer the potential for relatively high returns, prices can fluctuate due to market forces.
Some ETFs have complex structures and may not replicate the performance of the underlying index or asset.
There may be instances where you’re unable to sell your ETFs due to very low trading volumes.
There are two ways to fund your investment:
Every new nabtrade customer receives:
Additional service options include:
Get started today
1. Apply online - Complete our online application form - you can select from an Individual, Joint, Company or SMSF/Trust account.
2. Add cash to your account - watch the tutorial.
3. Start trading