Exchange-Traded Funds For Dummies, Australia and New Zealand Edition


Diversify your investments with today's fastest growing financial product

Exchange-traded funds (ETFs) offer access to a range of investments in a single trade, are usually less volatile than individual stocks, cheaper than most managed funds and more tax-effective. But how do you pick the one that's right for you? This straightforward book helps you weigh up your options, build an effective portfolio and maximise your profits.

  • Get to know the major players in Australia and New Zealand — find a broker, open an account and familiarise yourself with suppliers and indices

  • Understand risk control and diversification — learn the importance of a diversified, lowly correlated portfolio, and how ETFs can help you achieve this

  • Invest smartly in commodities and precious metals — tap into the returns offered by the Australian mining boom

  • Manage small-cap, large-cap, sector and international investments — take advantage of returns in local markets and invest directly in US-listed ETFs

  • Add bonds, REITs and other ETFs — secure consistent yields and add property to your investment portfolio

  • Work non-ETFs into your investment mix — improve returns through careful selection of active managed funds

  • Fund your retirement years — determine how much you need for retirement, and how ETFs can get you there

Open the book and find:

  • Advice on choosing ETFs over options, CFDs and warrants

  • Sample portfolios

  • Tips on revamping your portfolio based on life changes

  • How to avoid mistakes that even experienced investors make

  • Forecasts for the future of ETFs in Australia and New Zealand

  • A complete listing of Australian and New Zealand ETFs

  • Great online resources to help you invest in ETFs

Learn to:

  • Diversify your investment portfolio

  • Lower your investment costs and reduce your tax liabilities

  • Take advantage of Australia's mining boom by investing in commodities

  • Invest in international markets

Colin Davidson has been involved in finance for over 20 years. A freelance financial journalist, he previously worked for one of Australia's largest stockbrokers, managing its financial planning and superannuation business. Colin is also the author of Managed Funds For Dummies.

Russell Wild, MBA, an expert in ETFs, is a fee-only investment advisor and the principal of Global Portfolios.

Introduction 1

Part I: The ABCs of ETFs 7

Chapter 1: The (Relatively) New Kid on the Block 9

Chapter 2: What on Earth Is an ETF, Anyway? 25

Chapter 3: Working Out How ETFs Work 45

Chapter 4: Getting to Know the Players 61

Part II: Building the Equity Side of Your Portfolio 87

Chapter 5: Risk Control, Diversification and Some Other Things You Need to Know 89

Chapter 6: Domestic Bliss: Covering the Bases with Large Caps 107

Chapter 7: Small Caps: Big Potential 123

Chapter 8: Sector Investing: ETFs According to Industry 133

Chapter 9: Going International: ETFs without Borders 145

Chapter 10: Exploring ETFs Listed in the United States 163

Part III: Adding Other ETFs to Your Portfolio 189

Chapter 11: Real Estate Investment Trusts (REITs) and High-Yield ETFs 191

Chapter 12: All That Glitters: Gold, Silver and Other Commodities 211

Chapter 13: Working Non-ETFs into Your Investment Mix 229

Part IV: Putting It All Together 249

Chapter 14: Sample ETF Portfolio Menus 251

Chapter 15: Buying and Holding: The Key to ETF Investment Success 273

Chapter 16: Exceptions to the Rule — Rebalancing Your Portfolio 283

Chapter 17: Using ETFs to Fund Your Golden Years 303

Part V: The Part of Tens 323

Chapter 18: Ten Most Commonly Asked Questions about ETFs 325

Chapter 19: Ten Mistakes Most Investors (Even Smart Ones) Make 333

Chapter 20: Ten Forecasts about the Future of ETFs and Personal Investing 339

Part VI: Appendixes 347

Appendix A: Complete Listings of Australian and New Zealand ETFs 349

Appendix B: Great Web Resources to Help You Invest in ETFs 355

Glossary 363

Index 369