An introduction to ETFs

The rise of passive investment makes tremendous sense, especially when the index being tracked is on the large cap side. Move down the index, however, and it can pay to have someone sorting out the winners from the losers.

Australian investors are looking past the allure of franking credits and moving towards more unbiased diversification, with ETFs providing a cheap, liquid and highly available access point.

With traditional equity managers losing the fight against passive product providers, diversification into more specialist classes of asset management may provide a more sustainable path. But that’s a pricey endeavour, and easier said than done.