Exchange traded funds, or ETFs, have been available in Australia for nearly two decades. It took several years before retail investors fully understood the advantages of paying a little for a lot of market exposure, but now many investors understand the benefits of these amazing products.
With increased take-up has come an ever-growing array of products available to the retail investor and SMSF trustee. You can now access international markets on the local exchange, again at a fraction of the price, and also invest in all sorts of different asset classes via ETFs. They are an ideal way for SMSF trustees, who traditionally have a large exposure to Australian shares, to build their international allocations to improve diversity.
And although there are so many more ETFs to invest in than the basic Aussie exchange products, the investment fees are still very small compared to a managed fund which might offer a very similar investment proposition – such as an index fund.