ETFs

What is an Exchange Traded Fund (ETF)

An ETF invests in a portfolio of shares which reflect a particular index (similar to a managed index fund). However, ETFs are bought and sold on a stock exchange.

Why invest in ETFs?

Benefit	Description
Diversification	By investing in ETFs your money is spread across a larger number of companies in just one trade - this provides greater diversification when making small investments.
Reduced investment costs	Because you only need one trade to invest in several companies, you pay just one brokerage fee.
Ease of use	Trade ETFs just like shares. Use market, limit or stop orders, or use them in a CommSec Margin Loan.
International exposure	You gain exposure to an entire region, country or particular index through a single trade on the ASX.
Transparency	ETF providers publish holdings as often as daily, so you always know what you own.
Access to funds	Like a share purchase, whenever you’re ready to sell you can access your cash after T + 3 (the trade date plus three days).

Types of ASX ETFs

There are two main types of ETFs available through the ASX and overseas exchanges.

Domestic ETFs - Provide exposure to Australian market indices.
International ETFs - Provide exposure to established international market Indices.

You can also buy Exchange Traded Commodities (ETCs), which provide exposure to commodities rather than commodity companies, through CommSec.

How ETFs Compare to Shares and Managed Index Funds

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

Benefit	ETFs	Shares	Managed Index Funds
Diversification (exposure to multiple companies with a single trade)
Transparency (real time/daily pricing on the ASX)
Cost efficient (lower internal and management costs)
Direct Market Purchase (purchasing shares directly through a trading account)

Why Choose CommSec to trade ETFs?

Trade from $19.95 (conditions apply)
Benefit from free online research
Track the value of your ETF daily
Trade ETFs listed on international markets online
Invest in ETFs using your CommSec Margin Loan

DISCLAIMER Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a participant of the ASX Group.

This information is not advice and has been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason any individual should before acting on the information, consider the appropriateness of it having regard to their own objectives, needs, financial and taxation situation and if necessary, seek appropriate independent financial, foreign currency and taxation advice. Past performance is not a reliable indicator of future performance.

This website notes some features of ETFs and ETCs however is not a summary, please consider the product disclosure statement (PDS), prospectus or equivalent disclosure document, available from the product issuer before making any decision about the relevant ETF and ETC. ETFs and ETCs may exposure you to a number of risks including, but not limited to, performance risk and possible foreign currency exchange rate risk - please consider the risk sections of the disclosure documents (PDS or Prospectus) for the product

CommSec believes the information herein is correct and any opinions, conclusions or recommendations contained in this document are reasonably held or made as at the time of its compilation but CommSec makes no warranty as to the accuracy, reliability or completeness of that information. CommSec has not independently verified the information given in this document. Except to the extent that any liability under any law cannot be excluded, no liability for any loss or damage which may be suffered by any person, directly or indirectly, through relying upon any information or statement in this document is accepted by the Commonwealth Bank of Australia ABN 48 123 123 124, CommSec or any of their directors, employees or agents, whether that loss or damage is caused by any fault or negligence on their part or otherwise. CommSec receive campaign fees for the promotion of iShares.

ASX, and the Index owners, takes no responsibility for the content in this website or any decision to invest in the funds. The admission by ASX of ETF’s and ETC’s is not an endorsement by ASX of those investments.

Trades on ASX in the shares of an iShares fund are settled using CHESS Depositary Interests (or "CDIs").
The performance of an iShares fund is not guaranteed by any foreign or Australian regulatory or depositary institution, or any BlackRock or other entity.

Commonwealth Securities does not guarantee the performance of any ETF, ETC, fund or trust and makes no specific recommendation on funds or trusts included in any prospectus, PDS or offer document on its web site. Any Prospectus and PDS mentioned on this website does not constitute an offer in any jurisdiction where it would be illegal to make such offers or where such offers are not permitted.

CommSec Margin Loan is a product of Commonwealth Bank of Australia administered by its wholly owned but non-guaranteed subsidiary Commonwealth Securities Limited. Applications are subject to the Commonwealth Bank's normal credit approval. Full terms and conditions are available on application. Fees and charges apply.

Please be aware that a CommSec Margin Loan exposes you to unfavourable movements in the value of shares and units in managed funds, and possibly to margin calls. Please be aware that you are personally liable for any shortfall that occurs should your entire portfolio have to be sold to answer a margin call where there have been falls in the market value of your investments. Only investors who fully understand the risks associated with gearing into investments should apply.

Over-the-Counter (‘OTC’) CFD are speculative products that are highly leveraged and carry significantly greater risk than ungeared investments such as share trading; see the risk disclosure statement in the OTC CFD Product Disclosure Statement for details. A Product Disclosure Statement for OTC CFD issued by CommSec is available from www.commsec.com.au and should be considered before making any decision about the product.

© Commonwealth Securities Limited ABN 60 067 254 399, AFSL 238814.