Exchange Traded Funds (ETF’s)

Exchange Traded Funds (ETF’s)

Exchange Traded Funds (ETF’s) offer investors the ability to access an ever increasing product mix to add to their portfolios. ETF’s now offer access to major Global Indices, Commodities, Foreign Exchange, sector specific stocks and more.

The uptake of ETF’s is easy to understand, among investor portfolios as they offer increased investment options, lower costs, transparency of holdings and the simplicity of trading ordinary shares.

Overcoming what is often seen via managed funds, which is increased costs, fixed portfolio structures and lack of transparency in how the funds operate.


What is an ETF

An ETF is an open-ended investment fund that is traded on an exchange, just like traditional shares. ETF’s commonly used via Summit Wealth Management are listed on the ASX, however, we work with ETF’s listed on other international exchanges.

How ETF’s Work

ETF’s aim to track the performance, less any fees, of an underlying investment/asset class. Types of investments include Global Indices, Commodities, Foreign Exchange, sector specific stocks and particular trading strategies, such as a Covered Call option strategy.

Benefits of ETF’s

Cost Effective – ETF’s offer a lower fee base than many traditional investment products, such as managed funds. As many ETF’s are simply tracking a particular investment often expensive active management fees no longer factor into the ongoing cost. These savings are passed onto the individual investor.

Transparency – Information as to the composition of an ETF is easily accessible via the fund managers website. Resources include portfolio holdings and weightings, fee structure, performance and strategy objectives.

Availablity – ETF’s can be owned through a number of different structures, just like shares, this includes Self-Managed Super funds.

Using ETF’s in your portfolio

Summit Wealth Management use the approach of working with ETF’s as a base to access a broader range of a given market, such as the ASX 200. Once this base has been established, an investor can look to target stock or strategy specific investments offering a higher conviction approach. This aims to balance out the overall risk to a portfolio.