Exchange traded funds (ETFs) are low-cost investment vehicles that enable young Australians to easily buy shares in companies around the globe through a single trade on the Australian Securities Exchange (ASX). With ETFs, you can invest in some of the biggest technology names in the world, in a single trade on ASX.

Just like shares, ETFs are traded on the ASX through stockbrokers, including online brokers. But unlike shares, ETFs are diversified investments. That means that when you invest in an ETF you don’t just invest in one company, but a broad portfolio of shares held by the fund. In this way, your risks are reduced.

Going Offshore via the ASX

One key benefit of ETFs is they enable you to easily access shares listed on overseas stock exchanges, which can otherwise be very difficult and expensive to buy directly.

For example, with certain ETFs on ASX, Australian investors can access famous names such as Apple, Microsoft, Facebook and Alphabet (Google’s owner), which are listed in the US.

Another beauty of ETFs is that once you make a decision to buy in, the investment is professionally managed by the ETF provider. Minimum investment amounts, which will depend on your online broker, are often as little as $500.

Why Leave Australian Shores?

ETFs, like travelling abroad, let you extend your horizons and experience new opportunities overseas.

If you restrict your share investments to Australia, you restrict your choice. Mining and banking companies make up a large proportion of the companies listed on the ASX, whereas newer and more dynamic sectors such as technology are not well represented. No local equivalent of Google or Facebook exists and while there are some technology companies listed on ASX, such as Carsales.com, they do not compare to the international heavyweights.

International equity ETFs offer investments in technology leaders around the globe. The highest growth sector globally is the technology sector. So if you are looking to extend your horizons and want to back well-known technology players such as Google owner Alphabet, Facebook or Microsoft, there are several ETF options.

For example, the VanEck Vectors MSCI World ex Australia Quality ETF (QUAL) invests in a diversified portfolio of quality international companies listed on exchanges in developed markets around the world. Its top holdings include these three global technology leaders and other quality companies in other sectors in which local opportunities are limited like healthcare. This comes with a management cost of just 0.40% a year.

Arian Neiron — HTM Guest Contributor from VanEck (Managing Director and Head of Asia Pacific)

Important Information

This information is issued by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’) as the responsible entity and issuer of the VanEck Vectors MSCI World ex Australia Quality ETF (QUAL) (‘Fund’). It does not take into account any person’s individual objectives, financial situation or needs. Before making an investment decision in relation to the Fund, you should read the PDS and with the assistance of a financial adviser consider if it is appropriate for your circumstances. The PDS is available at www.vaneck.com.au or by calling 1300 68 38 37. The Fund is subject to investment risk, including possible loss of capital invested. Past performance is not a reliable indicator of future performance. No member of the VanEck group of companies gives any guarantee or assurance as to the repayment of capital, the payment of income, the performance, or any particular rate of return from the Fund.

QUAL invests in international markets. An investment in QUAL has specific and heightened risks that are in addition to the typical risks associated with investing in the Australian market. These include currency risks from foreign exchange fluctuations, ASX trading time differences and changes in foreign laws and regulations including taxation. QUAL is indexed to an MSCI index. QUAL is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to QUAL or the MSCI Index. The PDS contains a more detailed description of the limited relationship MSCI has with VanEck and QUAL.