As the share market in Australia continues to prosper, there is an ever-present danger within the investment circles that company and industry-specific risks will affect the share price and the value of your investments.
From unforeseeable circumstances, such as natural disasters or government intervention, through to the Royal Commission into the Banking and Insurance sectors, when an investment portfolio is heavily geared in one asset group, it can spell disaster.
ETF’s or Exchange Traded Funds, such as the Vanguard ETF are created to hedge against such volatility, offering investors a place within a fund that tracks with a market from which its shares, bonds, commodities or other asset classes.
Vanguard ETF has a wide range of ETF products across a wide range of asset classes for investors to consider. These include diversified, mixed, Australian shares, cash, fixed interest, property, international shares and more.
Providing such a wide range of ETF products allows Vanguard to offer investors options to diversify their portfolio, manage risk, invest in areas outside their traditional risk tolerance in a $4 trillion industry.
ETF’s such as Vanguard’s offer investors a unique opportunity to invest in a fund that has not only economies of scale in terms of investment, but also allows investors to effectively invest in more companies that individuals could foreseeably do.
The Vanguard International Shares Index Fund or VGS offers investors a fund that has shares in Apple, Microsoft, Alphabet, Amazon, Facebook and that’s just the top five!
The ETF provides exposure to many of the world’s largest companies listed in major developed countries. It offers low-cost access to a broadly diversified range of securities that allow investors to participate in the long-term growth potential of international economies outside Australia.
The Vanguard ETF is perfect for a new investor may want to get in and invest in the companies that are shaping the global economy, but don’t know where to start. In addition, the investment is ideal for an investor who is too heavily geared in another asset type of class – such as Australian shares or property – and is looking to branch out and diversify risk as the Australian property market declines and the share market experiences volatility.
Like with all financial products, shares, commodities, CFD’s, currencies there are always risks associated and ETF’s and Vanguards ETF’s are no different.
With ETF’s there are market risks such as the 2008 financial crisis that can put global markets into a spin.
Other risks can include the complexity of some ETF products and their structure, not to mention some ETF’s are based on markets that are exposed to different risks that may be unknown to you as an investor – such as global market movements, commodity tends etc.
The best way forward with ETF’s is to speak with your broker to ensure they align with your personal financial or investment strategy and start looking into how you can leverage ETF’s such as Vanguard’s ETF for your portfolio management.
We welcome you to give our team a call to discuss your investment goals and objectives.
You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.
For more information on currency investing, check out our full article: Exploring ETF: Exchange Traded Funds.