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INVESTMENT STRATEGIES
ETF EDUCATION
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WHAT IS AN ETF?
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iShares ETFs/BlackRock Funds cover a broad range of asset classes, risk profiles and investment outcomes. To understand the appropriateness of these Funds for your investment objective, please visit our product webpage
iShares ETFs/BlackRock Funds cover a broad range of asset classes, risk profiles and investment outcomes. To understand the appropriateness of these Funds for your investment objective, please visit our product webpage
Find out more about iShares ETFs/BlackRock products:
https://www.blackrock.com/au/individual/products/investment-funds
An Exchange Traded Fund (ETF) is a diversified collection of assets (like a managed fund) that trades on an exchange (like a share). It blends the benefits of both managed funds and shares and offers investors a simple and cost-effective way to help achieve diversification in their investment portfolios.
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Since the launch of the first ETF back in 1990, the industry has grown rapidly. Product innovation has continued to drive investor interest, with major breakthroughs in 2000 and 2004 when the first fixed income ETF and the first commodities ETF were launched, giving investors the ability to access bonds and physical commodities such as gold.
Trading shares is second nature for most investors. You can trade shares yourself or find a broker to help. Trading ETFs is no different from trading shares, and a little research goes a long way to helping you choose the right ETF.
COMPARING ETFS TO OTHER INVESTMENT PRODUCTS
To see how ETFs compare to other products in the market, refer to the chart below:
| ETF | BONDS | SHARE | TRADITIONAL MANAGED FUND | |
| Diversification of investment within the asset class | Basket of securities (generally high) | Individual securities (generally low) | Individual securities (generally low) | Depends on different funds - Basket of securities |
| Pricing | Continuous on exchange intra-day pricing | No centralised exchange or trade history | Continuous on exchange intra-day pricing | Daily quote after market close |
| Liquidity | Comparatively Higher | Varies | Varies | Varies between daily, monthly and quarterly |
| Transparency | Fund holdings disclosed as often as daily | N/A | N/A | Varies |
| Transaction costs | Varies, according to brokerage | Varies but can have high buy/sell spreads | Varies, according to brokerage | Varies, according to brokerage and fund manager |
| Management Fees | Typically less than traditional managed funds | N/A | N/A | Active funds generally incur higher management costs |
| Accessibility | High | Low for many bonds | High | Varies depending on fund |
| Limit order | Yes | No | Yes | No |
IMPORTANT INFORMATION
Issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975, AFSL 230 523 (BIMAL)
This material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances. Refer to BIMAL’s Financial Services Guide on its website for more information. This material is not a financial product recommendation or an offer or solicitation with respect to the purchase or sale of any financial product in any jurisdiction.
Information provided is for illustrative and informational purposes and is subject to change. It has not been approved by any regulator.
This material is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. BIMAL is a part of the global BlackRock Group which comprises of financial product issuers and investment managers around the world. BIMAL is the issuer of financial products and acts as an investment manager in Australia.
BIMAL is the responsible entity and issuer of units in the Australian domiciled managed investment schemes referred to in this material, including the Australian domiciled iShares ETFs. Any potential investor should consider the latest product disclosure statement (PDS) before deciding whether to acquire, or continue to hold, an investment in any BlackRock fund. BlackRock has also issued a target market determination (TMD) that describes the class of consumers that comprises the target market for each BlackRock fund and matters relevant to their distribution and review. The PDS and the TMD can be obtained by contacting the BIMAL Client Services Centre on 1300 366 100. In some instances the PDS and the TMD are also available on the BIMAL website at www.blackrock.com/au. An iShares ETF is not sponsored, endorsed, issued, sold or promoted by the provider of the index which a particular iShares ETF seeks to track. No index provider makes any representation regarding the advisability of investing in the iShares ETFs. Further information on the index providers can be found in the BIMAL website terms and conditions at www.blackrock.com/au.
BIMAL, its officers, employees and agents believe that the information in this material and the sources on which it is based (which may be sourced from third parties) are correct as at the date of publication. While every care has been taken in the preparation of this material, no warranty of accuracy or reliability is given and no responsibility for the information is accepted by BIMAL, its officers, employees or agents. Except where contrary to law, BIMAL excludes all liability for this information.
Any investment is subject to investment risk, including delays on the payment of withdrawal proceeds and the loss of income or the principal invested. While any forecasts, estimates and opinions in this material are made on a reasonable basis, actual future results and operations may differ materially from the forecasts, estimates and opinions set out in this material. No guarantee as to the repayment of capital or the performance of any product or rate of return referred to in this material is made by BIMAL or any entity in the BlackRock group of companies.
No part of this material may be reproduced or distributed in any manner without the prior written permission of BIMAL.
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