Exchange Traded Funds (ETFs) - VanEck Vectors

Exchange Traded Funds (ETFs) are one of the fastest growing investment products in the world.

ETFs are managed funds which have been quoted on a listed securities exchange to give investors a simple and cost-effective way to achieve diversification in their investment portfolios with a single trade.

Buying a single ETF security can give you exposure to an entire index of listed securities.

ETFs combine the features of unlisted managed funds and listed shares:

Characteristics shared with managed funds:

• Pool of money from a group of investors 
• Funds are invested and managed by a portfolio manager in accordance with a specific strategy
• Simple way of obtaining diversification
• Dividend income and franking credits pass through to investors

Characteristics of listed shares:

• Easy and flexible access
• ETF units can be bought and sold on the ASX throughout the trading day like shares
• Transparent intra-day pricing allowing investors to track performance throughout each trading day
• Traded via a broker or financial adviser under a HIN without any additional paperwork

Additional features of index-tracking ETFs:

• Liquid – trading liquidity provided through an appointed market maker
• Transparent – list of holdings published prior to the open of trading each day
• Removes portfolio manager risk by tracking an index instead of ‘stock-picking’
• Lower fees than actively managed funds
• Less turnover than actively managed funds results in better tax efficiencies
• Historically index funds outperform active managers 75% of the time

VanEck Vectors ETFs are designed to track the performance of particular purpose-built indexes.

How ETFs compare to managed funds

This table summarises the benefits of ETFs over unlisted managed funds.

Find out more about VanEck Vectors ETFs.