TABLE OF CONTENTS
- Disclaimer
- What is an ETF?
- What is the difference between a ETF vs a managed fund vs shares?
- Why investing in ETFs is the best?
- Known ETFs
- Read more:
Disclaimer
Please read our disclaimer. Click here.
What is an ETF?
ETFs give you a way to buy and sell a basket of company shares without having to buy all the components individually.
If you think of it in terms of food - ETFs are like the Cadbury Favourites chocolate box. Instead of having to buy every single chocolate bar (i.e. shares) yourself and diversify it yourself, you can buy the Cadbury Favourites chocolate box that contains all the flavours for you.
Also, its cheaper to buy an ETF than buying each individual stock/shares.
ETFs | Shares/stocks |
 |  |
What is the difference between a ETF vs a managed fund vs shares?
The difference between the two is that a managed fund is not listed on a stock exchange, whereas an exchange traded fund is and thereby enables trading flexibility, liquidity and intraday pricing. Your choice will come down to which type of investment vehicle best suits you.
| Stocks/Shares | Exchange Traded Funds (ETFs) | Managed funds | |
|---|---|---|---|
| What is it? | share holding in a single company | shareholding in multiple companies (a portfolio) | same as ETFs |
| Example | buy into Bluescope = you get shares in Bluescope | buy into ETFs = you get multiple fractional holdings in many companies. e.g. 1 unit in ETF = % in BHP, CBA, NAB, ANZ, etc. Saves you time having to buy each company one by one. | same for ETF. |
| Diversified | no. 100% your responsibility | yes. Done for you. You get some preferences in what the mix is | yes. Done for you by the fund manager. |
| Trade flexibility / control | per stock market. Easy to buy & sell anytime | per stock market. Easy to buy & sell anytime Sometimes a $1k minimum buy | Difficult to buy into a fund. You need to see a fund manager to check if you are elgible. Difficult to sell/exit the fund. No control over capital gains. |
| Dividends? | yes. annual, biannual, or quarterly. | yes. annual, biannual, or quarterly. | yes. usually annual |
| Transparency | yes | yes | generally no |
| Fees | brokerage fees > $10 | brokerage fees > $10 | management fee commission |
| Real time info | yes | yes | no. you must see the fund manager |
Why investing in ETFs is the best?
- An easier and cheaper way to acquire a diversified portfolio of company shareholdings;
Known ETFs
- https://www.betashares.com.au/fund-list/all-funds/
- https://www.ishares.com/us/products/etf-investments
- https://www.vanguardinvestments.com.au/retail/ret/investments/product.html#/productType=etf
- https://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm