| ETF Functionality | ETFs | Individual Stocks |
|---|---|---|
Continuous trading and pricing throughout the day? |
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Ability to be bought on margin? |
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Ability to buy and sell options? |
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Ability to short sell? |
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Ability to purchase through a traditional and/or online broker? |
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Can be used with a Superannuation Fund? |
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Can be traded on the ASX? |
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What is an ETF?
ETF is the acronym for Exchange Traded Fund. The easiest way to understand an ETF is to think about a managed/mutual fund that has very low management fees and trades through stock exchanges much the same way as BHP would. ETFs over indexes, currencies, and commodities are all readily available to Australian investors.
Why are Exchange Traded Funds ETF’s “changing the australian and global investment landscape”?
According to the survey of 840 global investment professionals, sponsored by State Street and SPDR University, 67 percent identified ETFs as the most innovative investment vehicle of the last two decades and 60 percent reported that ETFs have fundamentally changed the way they construct investment portfolios.
Why are Australian’s taking so long to catch on to this phenomenon?
The majority of financial planners generate their income from upfront and trailing commissions. However their is a rapid change occuring with several large institutions moving to a fee based arrangement with clients.
ETFs are then considered a very appropriate low cost solution for clients. There has been a rapid rise in self directed investing whether inside superannuation accounts or directly. As the online community grows in popularity ETFs also grow in number and size.
