Vanguard launches new suite of diversified ETFs
A new range of ETFs launched by Vanguard Australia will provide SMSF investors with exposure to investments across major asset classes and are aligned to specific risk profiles.
The four Vanguard Diversified ETFs, offer exposure to cash, Australian fixed interest assets, international fixed interest, Australian shares, hedged and unhedged international shares, international small companies and emerging markets.
Investors can choose between four different risk levels including conservative, balanced, growth and high growth. Each Diversified Index ETF is a share class of an existing Vanguard Diversified Index Fund.
“Vanguard’s Investment Strategy Group, a global team of researchers and analysts, set the asset allocation of the diversified funds as part of a robust framework used by Vanguard globally. This framework includes analysis of concentration risk and currency exposure, and incorporates comprehensive modelling generated by Vanguard’s proprietary forecasting engine, the Vanguard Capital Markets Model,” said Vanguard Australia.
“Each Vanguard Diversified Index ETF provides investors with extensive global exposure to around 6,500 individual companies and more than 5,000 fixed income securities.”
Vanguard Investments Australia head of market strategy and communications Robin Bowerman said in recent years many SMSFs have been seeking to add valuable diversification to portfolios which have typically been fairly concentrated in Aussie equities and cash.
“These Diversified Index ETFs deliver that in spades, offering broad diversification across and within all the major asset classes in the form of over 10,000 securities,” said Mr Bowerman.
“With each ETF’s asset allocation aligned to a specific risk profile, trustees have the ability to make a clear decision about the level of risk they are taking on.”
SMSFs, he said, were among the early adopters of ETFs in Australia as the products provided the added control, transparency and cost reduction benefits that many trustees were looking for.
“The Diversified Index ETFs meet all of these criteria, and with a single trade on the ASX provide access to expert portfolio management and automatic rebalancing,” he said.
“While SMSFs by their nature tend to be more self-directed, we see the potential for these diversified ETFs to be used as the index core of a portfolio allowing trustees the freedom to research and select other specific investments, weather that be individual securities, active funds or physical property.”