Barclays Bank Launches iShares ETFs in Aus, But Who Needs Them?

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There it is, in two full pages of nearly unreadable ALL CAPS font in today’s Financial Review: iShares have landed in Australia. iShares are a particular group of Exchange Traded Funds (ETFs), made available from Barclays Bank (LON:BARC). ETFs are popular because they allow you to slice and dice the market into different categories. Stocks are bundled by region, sector, market cap, or perceived risk.

We devoted a whole chapter to ETFs in our book, “The Bull Hunter”. We’ll say today what we said then: ETFs will be to this bull market what mutual funds were to the last bull market. Investors have demanded more flexibility and selection from Wall Street. Wall Street has obliged, and is happy to collect trading fees.

Will ETFs fly in Australia? Barclay’s Australian listings give Australian investors more choices from foreign stocks. They don’t do much to improve your stock selection locally, though. In the local market, you have financial stocks and resource stocks and a handful of retail blue chips. In other words, the local market-especially junior resource shares and small cap stocks-is still a stock picker’s market. And anyway, who needs to slice and dice the performance of the ASX/200 as an index. The whole is doing nearly as well as any of the parts.

Dan Denning
The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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Comments

  1. whoever wrote this article has no idea how many benefits ETFs actually have over traditional investment vehicles. ETFs are MORE tax efficient and MORE cost effective than the investment you are most likely currently in. Plus, they offer intraday liquidity and total transparancy. Australia should try to catch up with the rest of the developed world and take a hard look at these.

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  2. Agreed. The author clearly doesn’t understand what an ETF is.

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  3. All of the iShares ETFs appear to be low-fee index funds, something not mentioned at all in the above article.
    Until these appeared there were no exchange traded international index funds in Australia,so there definately was a gap in the market here.

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