Smart Investing with Robin Bowerman: Overwhelming choice
Tue, 7 Sep 2010 2:40pm
VANGUARD INVESTMENTS AUSTRALIA
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Smart Investing with Robin Bowerman 
Thank you for downloading the Smart Investing podcast from index fund manager Vanguard Investments Australia, on the web at vanguard.com.au
This commentary is written by Vanguard Head of Retail Robin Bowerman. The title is Overwhelming choice
It was first published on Monday 6 September 2010
And is read by Michael Mullins
Please remember that advice in this podcast represents a general view. It is recommended that you seek specific financial advice, before making investment decisions.
Sometimes investors can be offered an amount of product choice that is, frankly, overwhelming.
An overwhelming choice can unnerve and confuse investors who sometimes struggle to differentiate between products.
The Exchange Traded Fund (ETF) market in the US and Europe provides telling case studies of what could be described as an overwhelming choice.
And just read a few reports in the personal finance section of overseas newspapers and personal finance magazines to observe the challenge facing financial planners and specialist journalists in explaining this market to everyday investors.
According to BlackRock’s London-based ETF research team, 2282 ETFs are listed globally – with 866 of them in the US and 969 in Europe.
Yet research by investment fund researcher Morningstar shows there are just 32 ETFs listed on the Australian market – excluding exchange traded commodity funds.
This is not to say there isn’t room for more ETFs on the Australian market – far from it.
But we should be relieved that there is little likelihood that investors here will ever face what Katy Marquardt described this month in the Chicago Tribune as a “tsunami of choices” in ETFs.
Many would-be ETF investors are simply looking for extremely low-cost, easy-to-trade funds with widely diversified portfolios in their market of choice – often as the core of their portfolios. And ETFs are, of course, a highly efficient way to obtain a desired asset allocation.
Unfortunately, these straightforward objectives can become lost when an investor is overwhelmed by choice.
And that concludes the column
Overwhelming choice
from Robin Bowerman, Head of Retail at index fund manager Vanguard Investments Australia
To receive the column by email each week go to vanguard.com.au and register with Smart Investing.
Please remember that advice in this podcast represents a general view. It is recommended that you seek specific financial advice, before making investment decisions.
