exchange-traded funds

Diversification is key for building long-term, sustainable wealth and managing risk. While no single approach is best, using several diversification strategies offers sound protection against portfolio volatility, writes Selfwealth brand and content lead Robert Marfell.

The end of the pandemic is leading to a “new normal” for the ETF market in Australia, with thematic funds set to steal the spotlight from vanilla ETFs as investors look to take advantage of megatrends like decarbonisation, Global X’s Blair Hannon says.

ETFs have “well and truly taken over from actively managed funds” in investor preference for growth investments, advisers say – but when it comes to cash, they recommend eschewing the increasingly popular ETFs in favour of direct investments.

The US$10 trillion-plus exchange-traded funds market offers low-cost access to diversified investment opportunities, and Australian investors are capitalising, making A$10 billion in returns over the past year.

ETFs have revolutionised the investing universe for many good reasons. But ultimately ETFs are just like stocks – there are the good, the bad and the ugly.