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

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

Colin Davidson, Russell Wild

ISBN: 978-0-730-37697-2 September 2011 384 Pages




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

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