The Australian ETF Guide: How to invest more cheaply simply and effectively using exchange traded funds (ETFs)

by David John Bassanese

Overview

ETFs have taken global financial markets by storm.

In this book, you will learn how to gain cheap and easy access to a broadly diversified basket of Australian shares, international shares, bonds, commodities or even currencies – just as easily as buying company shares on the ASX using your share trading account.

Due to their low cost, transparency, and ease of use, ETFs are already improving the investment strategies of over 200,000 Australian investors, including many self-managed super funds (SMSFs).

Discover, in 4-easy steps, how millions across the globe and many Australian investors are already using ETFs to reduce the cost and complexity of their investment process.

  

Product Details

ISBN-13:	9780994515216
Publisher:	Cary Holdings NSW Pty Ltd
Publication date:	04/21/2016
Sold by:	Barnes & Noble
Format:	eBook
Pages:	228
File size:	5 MB

About the Author

David Bassanese is one of Australia's leading economic and financial market analysts. He is Chief Economist of BetaShares, one of Australia's leading managers of exchange traded funds. David is a former senior financial columnist of The Australia Financial Review newspaper, and interest rate strategist with Macquarie Bank. He is also a former Federal Treasury and OECD economist, and a graduate of Harvard and Adelaide Universities.

Table of Contents

Introduction: Why ETFs are an investor's best friend xxi STEP 1 Appreciating the importance of good investments 1 We're getting older and living longer. ...2 Achieving reliable investment returns remains difficult 3 Pensions and super concessions could be cut 5 Running an SMSF can be costly and complex 7 Many investors still don't use ETFs 15 STEP 2: Understanding what ETFs are and how to use them 19 What am I investing in? The three key features of an ETF 20 ETF's Unique Structure 21 Other ETF Benefits 25 Cost 26 Diversification 29 Liquidity 30 Fair Value 30 Asset Backing Security 31 Tax Advantages 31 Transparency 34 Survivorship Bias 34 ETF Concerns/Trading Tips 35 ETFs, ETPs, ETCs, and Exchange Traded Managed Fund 35 ETFs 36 Structured Products 38 Managed Funds 39 Tracking Error 40 Spot vs. Futures Prices 42 Issuer Risk 44 Counterparty Risk 45 Liquidity and Bid-Offer Spreads 48 Where can you find the Intra-Day NAV? 50 Top tips on buying ETFs 51 Currency Exposure 52 International Taxation 54 Market Pricing and International Time Zones 56 STEP 3: Knowing what ETFs are available in Australia 59 Global backdrop 60 Australian Market Overview 61 Australian Equity ETFs 66 Large Cap Weighted Australian Equity 66 Small Cap Australian Equity 70 Equal or Fundamentally-Weighted Australian Equity ETFs 73 Australian Sector ETFs 77 Ethical ETFs 80 Bear (or Short) Funds 81 Geared Funds 84 Managed Risk ETPs 89 High Yield ETPs 90 BetaShares' Covered Call Strategy 93 BetaShares Dividend Harvester Fund 95 Aurora Dividend Income Trust 98 Other "Strategic" or actively managed funds 99 International Equity ETPs 100 A Word on Currency Hedging 100 Global vs. Australian Performance 102 Broad (Developed Country) International ETPs 103 Alternative weights 106 Income Focused 107 Actively Managed 107 Managed Risk 108 World Ex-USA 109 United States 109 S&P 500 Index 110 Income Focused 112 Other US Equity Indices 113 Bear and Gear Funds 114 Asian Equity ETFs 114 Europe 116 Emerging Markets 117 Global Sector ETFs 120 Australian Fixed Income ETFs 122 Bond Market Basics 122 Bloomberg Composite Australian Bond Index 125 Bond Market ETFs 127 Corporate Bond Risk and Return 130 Indexed Bond ETFs 133 International Bond ETFs 136 Cash ETFs 139 Commodity ETPs 140 Broad Commodity ETPs 141 Gold ETFs 142 Other Commodity ETPs 144 Synthetic ETFs vs Structured Products 145 Hedged vs. Non-Hedged Commodity ETFs 147 Futures vs Spot Prices 148 Foreign Currency ETFs 150 STEP 4: Developing ETF Investment Strategies................. 153 Diversification within a Single Asset Class 154 Multi-Asset Class Portfolio 158 Strategic Asset Allocation 162 Tactical Asset Allocation 163 Fundamental or Valuation based strategies 164 Momentum&Trend based strategies 168 A simple momentum and trend-based rotation strategy 170 Some caution on momentum models 172 Core/Satellite Investment Portfolios 175 Passive vs. Active Managed Funds 176 Equity Market Tilts 178 Trade Market Views with a Market ETF 178 Thematic Equity Tilts 181 Financials vs. Resources 181 High Dividend Stocks 183 Small vs. Large Caps 184 Domestic vs. International Equities 185 Emerging markets 187 China 188 Global Sectors 189 NASDAQ-100 Index 190 Bond Market Tilts 191 Corporate vs. Government Bonds 191 Nominal vs. Inflation Protected Bonds 193 Local vs. International 195 Ad-Hoc Strategies 196 Cash Equitisation 196 Tax Loss Harvesting 196 Conclusion 199

Editorial Reviews

Review of past edition

"There are gems of knowledge on virtually every page" Christopher, Sydney

"..extremely informative and I have already made some initial investments." Gordon, Adelaide

.."a must read for investors looking at diversifying into ETF." James, Brisbane

Expert Review
"David Bassanese has been one of Australia's leading economists for some time. In his book, on how to use Exchange Traded Funds (ETF) Bassanese marries his significant analytical skill set to a clear explanation of how the ETFs work. A reader with a non-technical background would greatly benefit from the book as would more seasoned investors. Bassanese's vast experience in financial markets and in public policy at the Australian Treasury and the OECD have been put to good use in this volume."

Tim Harcourt, JW Nevile Fellow in Economics, UNSW Australia Business School and author of the The Airport Economist.

"A great read for those looking to handle their own finances using one of the best new investment products to have hit markets in years"
Phillip Baker, Senior Finance Columnist, The Australian Financial Review

From the Publisher