ETF ownership has taken off in Australia, and its unsurprising really. Given ETFs are one of few ways to access global markets - and they’re low cost- it’s clear why people seem to be flocking to them. In 2018 alone, the number of people using ETF’s grew by 23% to just under 400,000, according to the Investment Trends Australian ETF Report 2018. Not only are they a great way of opening up your portfolio, you can also use comparison filters to compare the many ETFs available, making it easier than ever to choose the right ones for you.

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ETFs give you access to global markets

We’ve all heard the case for investing in global markets – the Aussie share market is small compared with our neighbors in US, Europe and Asia, so global access opens up a new world of opportunities. Investors have traditionally accessed global markets through managed funds (which can be expensive) or by simply buying global stocks directly (which makes it tricky to get diversification). ETFs that track an index (such as the MSCI) can be a more efficient way of maximizing the reach and coverage of your investment dollar.

ETFs give you liquidity

You can buy and sell ETFs on the stock exchange like you would a share, and most ETFs give you the liquidity of highly-tradable investments, without the trading restrictions of traditional managed funds. Even better, ETFs give you access to investment opportunities that are not usually easy to access – like fixed income.

ETFs are often a low-cost investment

One of the main reasons for the popularity of ETFs is their lower cost structure. The Bell Direct ETF comparison filter shows that management fees for ETFs can be as low as around 0.1% pa and many passive ETFs are less than 0.5% pa. Fees will vary depending on the asset class, the provider and whether the ETF is actively managed (ETFs that are passive and track an index tend to be lower cost). When you potentially pay a lower fee for your investment, you get to keep more of the investment return.

There’s a huge range of ETFs available

Looking for exposure to the US share market? There’s a bunch of ETFs that mimic the S&P500 or the NASDAQ. Want exposure to the broad Australian sharemarket? There are ETFs that track the ASX300 and similar indices. What about investing themes like technology or sustainable investments? There are ETFs for that too. In fact, you can buy ETFs that give you exposure to currencies, international shares, industry sectors (like pharmaceuticals and telecoms), property, fixed income, among others.

With so many ETFs to choose from, it’s important to understand what’s out there so you can filter the ETF universe into a shortlist that suits your needs. Bell Direct has done the hard work for you, with Australia’s only comprehensive ETF comparison filter. You can filter by market, prices, providers… you name it - all you have to do is choose which ETF suits you best.

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