Best In­ter­na­tional Share ETFs Best In­come ETFs

GOLD WIN­NER ISHARES Aus­tralians can get a stake in the world’s great tech­nol­ogy com­pa­nies

Money Magazine Australia - - CONTENTS -

The iShares S&P 500 ex­change traded fund wins this year for pro­vid­ing low-cost ac­cess to the top 500 com­pa­nies in the US, in­clud­ing Ap­ple, Mi­cro­soft, Ama­zon, Berk­shire Hath­away, Face­book, JP Mor­gan Chase & Co, John­son & John­son, Al­pha­bet and Exxon Mo­bile.

The US share­mar­ket soared in the year to the end of Septem­ber be­fore be­ing sold down in Oc­to­ber. The hedged ver­sion of the ETF (fee 0.10%pa) per­formed bet­ter than the un­hedged ver­sion (0.04%pa) over the past year be­cause of the strength of the US dol­lar.

Twenty-six per cent of the iShares S&P 500 ETF is in­vested in in­for­ma­tion tech­nol­ogy com­pa­nies such as Ap­ple, Mi­cro­soft, Ama­zon and Face­book – a sec­tor that is largely miss­ing in the Aus­tralian share­mar­ket.

iShares orig­i­nally cross-listed its S&P 500 ETF on both the Aus- tralian and US share­mar­kets but in the sec­ond half of 2018 it con­verted it into an Aus­tralian-domi­ciled fund ETF, re­mov­ing the need for in­vestors to com­plete a US tax form known as W-8BEN.

In sec­ond place is Mag­el­lan, with a global eq­ui­ties ex­change traded prod­uct that is ac­tively man­aged. Mag­el­lan has pulled back its ex­po­sure to US share­mar­kets to 46%, with 15% in emerg­ing mar­kets, 12% in western Europe, 17% in cash and 9% in the rest of the world. It charges a rather high 1.35%pa.

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