Exchange Traded Funds (ETFs) have become popular investment options in recent years for Australian investors. An ETF is an open-ended fund which is bought or sold on the sharemarket just like any share and is generally designed to track the performance of an asset class or sector. They are known for their low management fees, transparency, and also for their simplicity.
While the more recently created ETFs are much more sophisticated in their features than their forerunners, the fundamentals of ETFs have not changed, maintaining their simplicity and broadening their appeal, crossing US$5 trillion in assets under management across global markets!
Lower your investment costs with BetaShares A200 ETF
Investing is about seeking to maximise your profits – and one of the few things an investor can control in this respect is the cost of their investments. Low-costs are perhaps one of the key reasons why ETFs are such a popular investment option.
Being index tracking or ‘rules-based’, ETFs look to maximise their returns by generally keeping their annual management costs lower than traditional investments such as actively managed, unlisted funds. For investors, savings made on investment transactions and product management fees can have a notable impact in the long run. Put simply, the higher the fee on your investments the less capital will be available to put to work in potentially generating returns.
Advantages of low-cost ETFs
BetaShares’ Australia 200 ETF (A200) is now the lowest cost Australian shares ETF available on the ASX, and, in fact, the world with only 0.07% p.a. management costs. In addition to low management costs, investors can also benefit from instant diversification in a single ASX trade.
Diversification: Investing in broad market ETFs is a good way to add diversification into your portfolio without having to pay a premium for it. Whether you are interested in a specific market or industry, there should be a choice available to suit your needs. For instance, you can choose ETFs that invest in shares globally, or regionally, such as Europe or Japan.
Lower management costs: Actively managed funds tend to attract high management fees. A passively managed ETF, such as the BetaShares Australia 200 ETF (A200), can be operated at much lower cost.
How to buy and use ETFs
Trading in ETFs is not different from the way you would trade any share – ETFs can be traded through your regular stockbroker or financial adviser, or you could buy and sell ETFs using your selected online trading platform.
Overall, low-cost exchange traded products are an efficient way to involve yourself in the sharemarket. For more information on the benefits of low-cost ETFs or the BetaShares Australia 200 ETF (A200), please contact us at BetaShares. Our range of intelligent investment products can help meet your investment needs.
 Source: Bloomberg, based on the expense ratios of Australian shares ETFs traded in Australia or on overseas exchanges.