We assign a ‘performance’ warning label to ETFs and managed funds which we believe will likely produce a return and risk profile that is different to a traditional ETF or fund operating in this sector. This will include most ETFs which uses an active or rules-based approach to investing, such as:

For example, let’s say you’re comparing two ETFs that you found here on the Best ETFs Australia website. Both of the ETFs operate in the Australian shares sector. So, regardless of which ETF you invest in, you get exposure to the local share market.

However, let’s say ETF #1 uses a rules-based “yield strategy” and only ever buys shares in companies which have high dividend yields. ETF #2 uses a traditional “market capitalisation” or vanilla indexing strategy — that is, for example, it only buys shares in the largest 200 or 300 companies on the market. Broadly, here’s what our team at Best ETFs Australia expect you will get from your investment:

Our take: don’t be fooled by every ETF and fund that claims to provide a ‘differentiated’ approach to investing. There’s no secret formula. Every investment has risks.

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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