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For the first episode of The Richards Report I spoke with Damien Sherman, Head of ETF Capital Markets at Vanguard Australia, about exchange traded funds (ETFs).
Here is a snapshot of some of the topics discussed:
What are exchange traded funds?
Can you outperform the market with an ETF? Index ETFs aren’t usually designed to outperform the market – they’re designed to perform at the market. However, the key benefit of ETFs is that you get the market exposure, but at a fraction of the cost of traditional ways of diversified investing – you don’t have to go out and actually buy 200 different shares to mimic the performance of the ASX 200.
Each ETF has a management expense ratio (referred to as an MER). This is typically very small (on the Australian share ETF it’s .14%) which equates to $14 on a $10,000 investment.
Some questions to ask yourself when considering the quality of an ETF:
As Damien mentioned during the podcast, you can also find out more information on Vanguard’s ETFs at the Vanguard Knowledge Centre.
At Six Park we use a portfolio of quality ETFs to give clients exposure to a recommended asset allocation for their own individual circumstances. We invest over seven different asset classes and rebalance portfolios free of charge as needed, overseen by our investment advisory committee.
I hope you enjoyed this podcast, please leave me feedback on iTunes, or contact me on twitter with ideas of what you would like to hear discussed.
Ted Richards is Six Park’s Director of Business Development.