Are new ETFs worth the hype? An insider’s view into the world of investing
Mar 18, 2024
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Exploring the world of ETFs with founder Nick Nicolaides, discussing thematic vs core ETFs and the hype around new ETFs. Delving into the marketing strategies, benefits of thematic ETFs, and enhancing financial literacy through free courses and resources.
Investors should assess the novelty and risks of thematic ETFs, balancing excitement with research for informed decisions.
Deep dives
Understanding Thematic ETFs vs. Core ETFs
Thematic ETFs are distinct from core ETFs, focusing on specific trends or industries, in contrast to broad market exposure. While core ETFs offer diversified, cost-effective exposure to various stocks, thematic ETFs cater to specific investment themes like clean energy or AI. Investors need to be aware of the differences in risk and diversification between thematic and core ETFs.
Thematic ETFs: Investment Considerations
Investors should carefully assess thematic ETFs, considering the novelty and specificity of the theme. While thematic ETFs offer exposure to niche sectors, they may lack diversification due to a concentrated focus on a few companies. Understanding the long-term viability and relevance of the investment theme is crucial for informed decision-making.
Benefits of Starting with Thematic ETFs
Beginning investors may find thematic ETFs as an accessible entry point into investing, offering exposure to specific sectors and companies. They can serve as educational tools to understand industries and individual stocks within the ETFs. However, investors should balance excitement with research and consider the level of diversification and risk within thematic ETFs.
ETFs and Investing Approach
Investors are encouraged to blend thematic ETFs with diversified core ETFs for a balanced portfolio approach. Thematic ETFs can provide a layer of excitement and targeted exposure, complementing the stability of core holdings. Understanding the investment thesis, diversification, and risk profile of thematic ETFs is essential for effective portfolio construction.
Today Kate & Owen chat to Nick Nicolaides, the founder of Pearler, our wonderful long-term partner of the podcast.
In today’s conversation, we’re tackling a topic Nick is very familiar with: ETFs. Specifically, what are thematic ETFs, how new ETFs come to market and how to know if you’re falling prey to an ETF hype cycle. Plenty for brand-new and experienced ETF investors to take away today, so let’s jump right in!
Pearler, the broker for long-term investors. Sign up to Pearler using the code “RASK” for $15 of Pearler Credit: bit.ly/Pearler
DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you’re confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser.