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johnfm

Original Poster:

10,451 posts

130 months

[news] 
Thursday 12th July 2012 quote quote all
I assume the benefit of ETFs is that they are effectively 'diversified' so may more loss resistant than a small portfolio of individual stocks - enabling me to, say, invest in brazilian resources, or Chinese tech, or Aussie mining etc.


I assume ETFs do not pay any dividend at all - just all capital growth?

I like the 'idea' of a few blue chips with a decent divi and a small allocation to, say, oil smallcaps.

Stick with shares or have a look at ETFs too?

ringram

13,477 posts

128 months

[news] 
Thursday 12th July 2012 quote quote all
ETF's are usually traded automatically in line with their model of investments.
So re-balancing etc is done programatically. This keeps costs low as they are not actively traded, so no fat cat to keep in cream.
Just Skynet to appease.

Also many do pay dividends. IUKD for example. Or IDVY.

Do some R&D on ETF issues, some lend their shares for shorting out and earn a return on the loan to reduce fee's (but increased counterparty exposure) Think MF Global etc.

On the whole the larger bigger vendor ones look like sensible investments to me. Given most active funds fail to match or better the market.

Newc

683 posts

62 months

[news] 
Thursday 12th July 2012 quote quote all
^^ this, plus also be careful if you're not buying a straightforward 'fund of funds' type ETF which buys an index or some other specific set of securities. Some of the resource / commodity ETFs are buying futures, not the underlying asset. It's not necessarily a bad approach, but you do need to be clear what it is you are getting for your money. You can also short and leverage via ETFs.

Answering your specific question, ETFs are an excellent way to cover a specific sector if you don't have the time or expertise to do the stock picking yourself.

johnfm

Original Poster:

10,451 posts

130 months

[news] 
Saturday 14th July 2012 quote quote all
Anyone know if I can get my employer to make their pension contribution into my SIPP?

I assume so.
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