Smart Investing
-
The Chinese calendar says this is the year of the dragon. Less auspicious perhaps but for Australian investors this is shaping up as the year of fixed income.
-
By taking a few simple steps, super fund members can both boost their retirement savings and legally minimise tax on their super – for themselves and their beneficiaries.
-
Self-managed super funds seem set to remain by far the preferred superannuation choice among higher-balance members – particularly those in retirement.
-
This is a question that many investors are, not surprisingly, asking themselves. But what might surprise some investors is that the answer is not as elusive as it may at first seem.
-
Changes to the ASX operating rules to allow fixed income Exchange Traded Funds (ETFs) to trade on the Australian market will open a new means for investors to efficiently, conveniently and inexpensively diversify their investment portfolios.
-
- Podcasts
News & Commentary
Overwhelming choice 06 Sep 10
Sometimes investors can be offered an amount of product choice that is, frankly, overwhelming.
An overwhelming choice can unnerve and confuse investors who sometimes struggle to differentiate between products.
The Exchange Traded Fund (ETF) market in the US and Europe provides telling case studies of what could be described as an overwhelming choice.
And just read a few reports in the personal finance section of overseas newspapers and personal finance magazines to observe the challenge facing financial planners and specialist journalists in explaining this market to everyday investors.
According to BlackRock’s London-based ETF research team, 2282 ETFs are listed globally – with 866 of them in the US and 969 in Europe.
Yet research by investment fund researcher Morningstar shows there are just 32 ETFs listed on the Australian market – excluding exchange traded commodity funds.
This is not to say there isn’t room for more ETFs on the Australian market – far from it.
But we should be relieved that there is little likelihood that investors here will ever face what Katy Marquardt described this month in the Chicago Tribune as a “tsunami of choices” in ETFs.
Many would-be ETF investors are simply looking for extremely low-cost, easy-to-trade funds with widely diversified portfolios in their market of choice – often as the core of their portfolios. And ETFs are, of course, a highly efficient way to obtain a desired asset allocation.
Unfortunately, these straightforward objectives can become lost when an investor is overwhelmed by choice.
* Written by Robin Bowerman, Head of Retail at Vanguard Investments Australia.
To receive this column by email each week, register with Smart Investing™.
What can I do next?
- See Prices & Performance data for Vanguard funds
- Learn more about our Managed Funds up to $500,000
- Lean about our Managed Funds over $500,000
- Discover our Exchange Traded Funds
- Order or download a 2009 Index Chart
- Contact Client Services
