Below is a comprehensive selection of ANZ ETFS' existing brochures to download:
|Introducing ANZ ETFS||Learn about the partnership between ANZ and ETF Securities|
|ANZ ETFS ETFAQ||The educational guide to Australian Exchange Traded Funds (ETFs)|
|ANZ ETFS Portfolio Construction Guide||ANZ ETFS' guide to portfolio construction|
|ANZ ETFS Australian ETF Landscape||ANZ ETFS Australian ETF Landscape|
ANZ ETFS’ product range is designed to offer secure, simple and cost effective investments to help meet investors’ evolving needs.
Exchange Traded Funds
An exchange traded fund is a type of managed investment scheme which is traded on the stock exchange. An ETF holds a portfolio of shares, a commodity or a currency, that closely mirrors its benchmark. ETF share prices generally move in line with the value of the underlying assets.
ETFs deliver investors transparency because the portfolio, costs and pricing are all publicly and readily available. Investors can clearly see what they’re buying and selling.
Our products are suitable for a range of investors seeking diversification, income, capital growth and wealth preservation. For those managing their own retirement funds through self-managed superannuation funds, ANZ ETFS broadens their investment choice and offers efficient portfolio diversification.
Are ETFs Liquid?
ETFs offer investors strong liquidity as they are traded on a public stock exchange where buyers and sellers can clearly see the market in operation.
By executing a trade on the ASX through a broker, investors can use ETFs to quickly access or exit a market or sector. There are no application forms or waiting periods, unlike managed funds where investors must submit applications to cash in their investments.
Where do ETFs fit into the investment landscape?
ETFs are now widely recognised as a simple and cost effective way to gain exposure to a market or asset class.
The desire for increased investment diversification is one reason why Australians invest, or are looking to invest, in ETFs. Diversification can reduce portfolio risk and assist investors to smooth out their investment returns, ensuring a more consistent result over the long-term.
ETFs offer investors simple building blocks to gain exposure to new markets or sectors as they construct a well balanced portfolio or enhance an existing suite of investments.
Find out more below:
|An Introduction to ETFs||Chapter One - An Introduction to ETFs|
|ETF structures||Chapter Two - ETF Structures|
|ETF risks||Chapter Three - ETF Risks|
|Taxation||Chapter Four - Taxation|
|Trading and Pricing||Chapter Five - Pricing|
|Costs and Performance||Chapter Six - Costs and Performance|
|The future of ETFs||Chapter Seven - Future of ETFs|
ETFaq - The educational guide to ETFs
ANZ ETFS believes investors should always understand and fully appreciate the risks involved in their investments. In light of this, we have produced the following guide which aims to provide investors with an unbiased reference to Exchange Traded Funds.
The guide seeks to educate investors on the basics of Exchange Traded Funds, covering everything from how the products work to how you can buy and sell them. We hope you find this of value and interest.
ANZ ETFS Australian ETF Landscape
ANZ ETFS produces a quarterly report outlining all the available Exchange Traded Products in Australia. This is designed to be a bias-free, neutral overview of all products to assist investors and intermediaries to choose the most suitable products for their portfolios.
How to invest
ETFs offer investors flexibility because they can be bought and sold on the ASX like any other share, through normal brokerage accounts, whenever the market is open. There is no minimum investment.
Buying an ETF is like purchasing any other share on the ASX. You pay a brokerage fee to the company executing the trade on your behalf.
ETFs are designed to minimise portfolio turnover and related transaction costs. The ETF manager charges a ‘management fee’ (MER) to cover their costs of managing the ETF. This cost is not directly charged to the ETF owner but deducted from the ETF’s assets.
Portfolio Construction Guide
Investors' needs will vary depending on their risk profile and investment goals.
ETFs can be used to build a new diversified portfolio, or enhance an existing one, to achieve a range of investment objectives including:
- Wealth protection
ANZ ETFS' portfolio construction guide explores the benefits of using ETFs within an investment portfolio and explains some common portfolio diversification techniques.
Video - What investors should consider when choosing an ETF
ANZ ETFS Head, Kris Walesby speaks to Tony Kaye, Editor of the Eureka Report about what investors should consider when picking an ETF.
As a unique collaboration between one of Australia's strongest, most trusted banks and a specialist global provider of exchange traded products, ANZ ETFS offers access to in-depth research and analysis of Australian and global financial markets.
To receive our regular ANZ ETFS e-newsletter, offering you access to the latest industry insights, educational webinars and upcoming events, simply sign up.
For the latest ANZ research and insights, please visit ANZ Live.
To view ETF Securities’ latest research, visit www.etfsecurites.com.
Frequently Asked Questions
Q: What are Exchange Traded Funds (ETFs)?
An exchange traded fund (ETF) is a fund or unit trust that is quoted and traded on a stock exchange such as the Australian Securities Exchange (ASX).
ETFs are one of the fastest growing categories of investment products in the world, with just under $3 trillion of assets managed in ETF products globally.
ETFs are built like managed funds, but trade like shares, meaning that pricing is transparent and that the products can be bought and sold throughout any trading day just like ordinary shares. ETFs generally aim to track as closely as possible the performance of a given index or asset class.
They are transparent, liquid, cost-efficient and flexible investment tools – designed to be attractive to both individuals and institutional investors.
Q: Who is the company behind ANZ ETFS?
ANZ ETFS is a joint venture between ANZ, one of Australia’s leading banks, and ETF Securities, a leading provider of exchange traded funds.
ANZ ETFS has been an issuer of ETFs since June 2015, with products tracking the performance of a range of underlying assets including commodities, foreign currencies and equity indices.
Q: What are the benefits of ETFs?
ETFs help investors gain exposure to a range of investment strategies that can be accessed as simply as buying any share.
ETFs are open-ended funds, meaning the number of units on issue can be increased or decreased in response to daily demand. Units can be bought and sold at any time throughout the trading day. Dedicated Market Makers and Authorised Participants enhance this daily liquidity and provide robust bid-offer spreads. ETFs have similar liquidity characteristics to the underlying shares that comprise the relevant index, or the underlying asset.
ETFs aim to closely track the performance of a specified index or asset. They have a transparent fund and cost structure. Portfolio composition and fee information is published on the ANZ ETFS website (www.anzetfs.com).
Because ETFs aim simply to track the performance of an index or asset, there is no “active management” being undertaken by an investment manager. ETFs therefore have significantly lower management fees than actively managed funds.
Q: How do I buy ANZ ETFS products?
ANZ ETFS products are traded on the ASX. As such, they can be bought or sold like any share through a stockbroker, financial adviser or online broker. There is no need to open a separate trading account.
ETFs can be traded at any time during normal market hours, using all the trading techniques applicable to shares (e.g., market orders, limit orders, stop orders).
Wholesale clients can also buy and sell through our Authorised Participants and Market Makers.
Q: How do I track the value of my ANZ ETFS ETF?
The value of your investment can be calculated by multiplying the per unit Net Asset Value (NAV) of the ETF by the number of units you hold in the ETF. The NAV for each ETF is published on the ANZ ETFS website daily.
Q: How is the trading price of an ANZ ETFS ETF calculated?
The total NAV of each ETF will be calculated on each ASX trading day by totalling the values of all assets held by that fund and deducting from the total any accrued fees or expenses. The per unit NAV is then calculated as the total NAV of the fund divided by the number of fund units on issue.
- For ETFs referencing equity indices, the assets of the fund will consist largely of a portfolio of shares along with cash. Shares are valued at their official closing levels on the relevant exchange. Cash is valued at its notional value in Australian dollars.
- For ETFs referencing foreign currencies, the assets of the fund will consist of deposits in an interest bearing account denominated in the relevant foreign currency. These deposits will be valued in Australian dollars at the relevant benchmark foreign exchange rate.
- For ETFs referencing physical commodities, the assets of the fund will consist of physical metal holdings, which are valued at the relevant fixing price and converted to Australian dollars at the relevant benchmark foreign exchange rate.
Further information on the NAV calculations and valuation policies of each ETF are available in the relevant Product Disclosure Statement (PDS) for that fund.
ETFs are designed such that their trading price on the ASX should generally closely track the NAV of the ETF. Trading prices, however, will be a function of supply and demand amongst investors wishing to buy and sell ETF units and the bid-offer spreads that Market Makers are willing to quote at any particular time and may differ from the fund’s NAV.
Q: How do the management costs of ANZ ETFS ETFs compare against those of traditional active managed funds?
Managed funds in Australia typically charge a management fee (MER) of around 1.5% - 2% per annum, compared to ETFs which are considerably lower than this.
ANZ ETFS’ MER ranges from 0.24% - 0.40% per annum, depending on the product.
Q: What costs are incurred when purchasing an ETF?
Fees and expenses that an investor may be charged include:
Authorised Participants will be charged a fee for each Creation Request.
Authorised Participants will be charged a fee for each Redemption Request regardless of the number of Units being redeemed.
Out of the assets of each Fund a Management Fee expressed as a percentage per annum of that Fund’s Net Asset Value will be paid to the Responsible Entity. The Management Fee will be accrued daily and paid monthly in arrears.
Some ETF products may incur additional costs, depending on the transactions involved. The relevant fees and charges for each ETF product can be found on the ANZ ETFS website (www.anzetfs.com) or in the Product Disclosure Statement (Section: Fund Supplements).
Q: Do ANZ ETFS pay dividends/distributions?
Yes – certain ANZ ETFS products pay dividends/distributions.
To the extent that there is any income received by a Fund, it is expected that it will be distributed to Holders, however there is no guarantee that a Fund will make any distributions.
Holders can choose to have their distributions paid directly into a nominated bank account in cash (via electronic funds transfer) or participate in the Distribution Reinvestment Plan.
Holders of Units in a Fund at the end of a distribution period are entitled to a pro-rata share of the distributable income of a Fund based on the number of Units held at the end of the distribution period.
It is expected that each Fund distributing quarterly will make distributions for the periods ending on 31 March, 30 June, 30 September and 31 December each year. Funds distributing annually will make distributions for the period ending 30 June each year.
The amount of each distribution will vary depending on the income generated by the assets of a Fund and there may be periods when a Fund does not pay a distribution.
Distributions are expected to be paid to Holders within 30 days of the end of the distribution period.
Distributions may be reinvested under the Distribution Reinvestment Plans as described below.
Q: Do ANZ ETFS offer Distribution Reinvestment Plans (DRP)?
Yes – on products that pay regular distributions.
A Distribution Reinvestment Plan is available to eligible Holders. Participation in the Distribution Reinvestment Plan is subject to the rules of the Distribution Reinvestment Plan policy document available from the website of the Responsible Entity. Holders can choose to:
a) participate in the Distribution Reinvestment Plan, where all distributions are reinvested in additional Units in the same Fund; or
b) have their distributions paid directly into a nominated bank account in cash (via electronic funds transfer).
Partial reinvestment will not be available.
Holders can notify the Registrar which of the above alternatives they wish to elect by completing the relevant forms. Details regarding when Holders’ elections must be advised as above, for a particular distribution, will generally be announced via the ASX Markets Announcements Platform.
If a Holder does not elect one of the above alternatives, distributions will automatically be paid in cash (via electronic funds transfer).
Q: How is the DRP price calculated?
Units issued under the DRP will be issued at a price calculated in accordance with the fund’s constitution on the distribution ex-date.
Fractions of units issued under the plan following the entitlements calculation will be rounded down and the residual cash balance carried forward to the next period.
Q: What is the difference between an ETF and a Managed Fund?
Like an ETF, investors’ contributions to a Managed Fund are pooled so they can be managed as a fund, in line with an investment strategy. However, whereas an ETF will seek to track an index, an actively managed fund will employ a professional fund manager to select the assets that the fund invests in.
Due to the fees charged for the professional fund manager the costs of investing in a managed fund tend to be significantly higher than the cost of investing in an ETF.
As managed funds are not listed the investor will usually trade directly with the fund manager when buying or selling units, there will typically be one price per day available to investors (whereas ETFs trade throughout the day) and this will be forward priced (i.e. the investor doesn’t know the price they traded at until the next day).
As the performance of a managed fund is determined by the investment decisions taken by the fund manager, there is the risk that the fund may under perform its benchmark.
Q: What’s the difference between an ETF and a Listed Investment Company (LIC)?
A LIC pools investor contributions and is managed by a professional fund manager, so fees tend to be significantly higher than an ETF and there is the risk that the LIC may under perform its benchmark.
Although a LIC is listed on the secondary market (so trades throughout the day), a LIC is closed-ended which means it issues a fixed number of shares (whereas an ETF is open-ended so it can create or cancel shares when investors trade the ETF).
Because the LIC only has a set number of shares the value of the share will change depending on supply and demand, as well as the performance of the underlying asset, so the LIC can trade at a premium or discount to the value of its underlying assets.
COMPARING ETFs WITH MANAGED FUNDS AND LISTED INVESTMENT COMPANIES (LICS)
Open or closed-ended
Remains very close to NAV as supported by market makers
Remains close to NAV
Linked to NAV but can vary due to demand
Bid/ask spread applies
No bid/ask spread applies; single price
Bid/ask spread applies
During market hours at quoted prices
At most once a day
During market hours at quoted prices
On-exchange, through brokers
Directly with fund manager
On-exchange, through brokers
Q: Is ANZ ETFS' physical gold ETF 100% physically backed? Where is the gold stored?
The ANZ ETFS physical gold ETF is 100% physically backed by gold bullion, which is stored at ANZ’s Singapore gold vault.
Each security holder will have a ‘metal interest’ of gold bullion in an allocated account. Held in the customer’s name, the account evidences that uniquely identifiable bars of gold have been “allocated” to the customer and are segregated from other metal held in the custodian’s vault. The customer has full title to the gold held in the allocated account.
Q: Are ANZ ETFS' foreign currency ETFs 100% physically backed? Where is the currency stored?
The ANZ ETFS US Dollar and Chinese Renminbi ETFs are physically backed by their respective currency, which is stored in foreign currency accounts with ANZ Banking Group.
In the event that any interest is earned by the accounts, it will be distributed to the security holders.
Q: Are there any tax considerations to investing in ETFs?
As with all investment products, there are tax considerations that should be explored prior to investing in the ETFs. You should read the relevant Product Disclosure Statement, and consider your own personal circumstances including seeking independent tax advice.
Security holders will receive an annual end of financial year statement, which can be used to prepare their tax return.
Q: Are ETFs tax efficient vehicles for Australian investors?
As individuals personal circumstances can vary, we always recommend that investors seek professional advice if they have any tax related questions.
As our US high yield ETF is domiciled in Australia, Australian investors do not need to complete a W8 Ben to avoid paying the full rate of withholding tax on dividends and will not be subject to US Estate tax.
Both of our Australian equity ETFs are eligible to receive franking credits on dividends, any franking credits received by the fund will be passed on in full to investors.
All of our management fees are inclusive of GST, so the published management fee is the total annual fee that investors will pay.
Q: Where do I go to obtain more information about ANZ ETFS products?
- Visit the 'Products' section of our website: www.anzetfs.com
- Phone +61 (0)2 8937 7245 (Monday – Friday, 8.30am – 5pm AEST)
- Speak to your investment professional.