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INVESTMENT STRATEGIES
ETF EDUCATION
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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.
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.
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 |