Why investing in ETFs makes so much sense

I think that exchange-traded funds (ETFs) are a great way for people to invest because of how easy it is for people to do it.

ETFs can also make it so normal people’s portfolios can outperform the professionals (after fees).

How? Here are my reasons:

Typically low fees

A lot of the index-based ETFs out there have very low management fees.

You don’t want to be paying much in management fees because all that does is line the pockets of the manager.

Some managers are worth it because of their ability to outperform their target benchmark. However, that’s not the case with lots of managers. So, you can choose an investment that may be able to outperform the professionals that charge 1% or more, with ETFs that might cost a fraction of that.

Remember, fees are reducing your wealth.

Why not just match the share market’s return, which is usually a great wealth building rate, and make it easy?

Usually good diversification

Buying an ETF means that you are investing in an entire portfolio. If you buy Commonwealth Bank of Australia (ASX: CBA) shares then you just invested in one company.

However, picking an investment like BetaShares Australia 200 ETF (ASX: A200) or Vanguard US Total Market Shares Index ETF (ASX: VTS) means you are invested in hundreds or even thousands of businesses in just one choice. That’s great diversification to me.

How much sector industry diversification you get depends on what ETF you choose to buy.

More time for you

Doing the ‘work’ to find quality individual shares to buy can take quite a long time.

If that’s what you want to do, and you’re good at it, then great.

But, most people do not have the time, skills, temperament or patience to invest in individual shares.

Instead, picking an ETF can take just a few minutes compared to hours for the individual share.

With all that extra time, you can spend it either doing things you like doing (eg spending time with family) or use it to earn more money (which you could then invest).

ETFs are so good for so many reasons in my opinion.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

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General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

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I really care about your experience today.

Please, let me know if you have any suggestions we can use to improve our site and help others invest in ETFs. 

Cheers! 

Owen Rask