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Why do you have ETFs only (apart from a nominal amount of cash) and no other financial instruments in your portfolios?
QuietGrowth believes that the exchange-traded fund (ETF) is the most suitable type of financial instrument for broad exposure to an asset class, provided a suitable ETF for that asset class is available.
An ETF is an investment fund traded on stock exchanges, much like a stock. An ETF holds assets such as stocks, bonds, or commodities. Most ETFs track an index, such as the ASX 300. QuietGrowth uses ETFs traded on the Australian Securities Exchange (ASX).
However, QuietGrowth is not restricting itself to using ETFs only. After all, ETFs are a relatively recent innovation, with a history dating back only to the early 1990s. Whenever QuietGrowth finds a better financial instrument to design its portfolios, we will consider adopting it.
QuietGrowth also considers Exchange Traded Products (ETPs) other than ETFs, where preferred. For example, for the natural resources asset class in QuietGrowth Portfolios, we also consider using Structured Products, a type of ETP, instead of ETFs.
Refer to our Investment Methodology page and ETF Investing knowledge resource for more information.
Also read the answers to the related questions:
- Why do you use ETFs in your portfolio instead of individual stocks and bonds?
- Why do all your portfolios have the same ETFs?
Additionally, you can consider to read the following knowledge resource: