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ETFs vs other investments

HOW DO I CHOOSE BETWEEN ETFS, MANAGED FUNDS OR DIRECT SHARES?

Different investment strategies and investment structures offer you a range of benefits, depending on your personal situation. You may decide to use a number of different types of investments in your portfolio in order to meet your investment goals.

When deciding how to invest, it is important to understand the features of the various investment types.

For example:

• ETFs are great for investors who like to hold direct shares, but are keen for greater diversification. They are also ideal for investors who want the option of automatic portfolio rebalancing in line with an index.
• Managed funds are ideal for investors who want diversification, particularly from investment strategies that blend multiple investment managers and styles with the potential to generate excess returns.
• Direct shares allow investors to pick specific individual companies and undertake their own trading and portfolio rebalancing.

 

	Diversification in holdings	Potential to outperform a benchmark	Priced throughout the day	Exchange traded
ETFs	Yes	No	Yes	Yes
Managed funds	Yes	Yes	No	No
Direct shares	No	n/a	Yes	Yes