Index ETFs and managed funds: Start with the core
When you're constructing portfolios for your clients, using low-cost index ETFs and managed funds can serve as the foundation for an investment strategy. These offer an effective way to achieve broad diversification and can be easily positioned to help meet your clients' risk and return requirements.
And since index funds seek to track market returns, establishing performance expectations with investors is much simpler. That's just one of many benefits. Index-based investment strategies are typically low in their portfolio turnover, relative to active strategies, which can help reduce an investor’s tax burden.
We’re the pioneers of indexing
The Vanguard Group Inc. launched the first index fund for individual investors in 1976. And we've been honing our benchmark selection and tracking skills every day since.
Since then, we've built a sustainable, scaled, and successful index business. We are the partner you can count on, day in and day out, for tight tracking of the markets and sophisticated portfolio management. This deep expertise along with our commitment to advisers is why Vanguard remains your ideal choice for indexing.
Which product structure make sense for your client?
The product structure you choose (ETF or managed fund) depends on your client's individual circumstances and your business preferences. Here are some key differences to note about each of the structures.
| Feature | ETF | Managed Fund |
|---|---|---|
Professional investment management | Yes | Yes |
Transparent holdings | Yes | Yes |
| Execution price | At market on exchange | End of day NAV |
Trading flexibility | Trade any time (during market hours) | One unit price struck on a daily basis |
How to transact | Via the ASX (broker platform or Vanguard*) | Via platform or direct with Vanguard** |
Professional investment management
Managed Fund
Transparent holdings
Managed Fund
At market on exchange
Managed Fund
End of day NAV
Trading flexibility
Trade any time (during market hours)
Managed Fund
One unit price struck on a daily basis
How to transact
Via the ASX (broker platform or Vanguard*)
Managed Fund
*Excludes VTS and VEU
**Wholesale funds
Client resources
Plain Talk Guide – ETFs
Plain Talk Guide – Managed funds
