[Smart Investing] Choosing an index fund: it's more than just expense ratio

Investments and personal finance insights from Vanguard Australia

10 June 2020 Hi everyone,  First and foremost, we would like to acknowledge the series of tragic events that have recently unfolded, with the deaths of George Floyd, Breonna Taylor and Ahmaud Arbery and the subsequent protests both in the United States and globally. As a company, we are troubled by the systematic issues that have led to such injustice. We at Vanguard condemn any form of racism, xenophobia or prejudice, and will continue to strive every day to make Vanguard and our wider community more diverse and inclusive. You can read our perspective on these recent events and details of our ongoing efforts to address racial injustice and inequity here.  In this week's Smart Investing, Vanguard's Head of Equity Indexing for Asia Pacific Duncan Burns has written a piece on why prudent investment selection cannot be achieved by focusing on cost alone. When searching for and selecting between index investment options, investors should use a decision-making framework that takes into account a range of factors.    Vanguard Senior Financial Writer Tony Kaye also takes a look at the recent market rebound and how quickly share markets can move, hence why trying to time equity transaction decisions around unknown variables is generally a dangerous tactic. Lastly, we discuss Vanguard's forecast for long-term market returns and how shares may perform better over the next decade than we had forecast at the end of last year, while fixed income returns may be even more muted. As always, feel free to email us with your questions or feedback.  Regards, Robin Bowerman Head of Corporate Affairs Vanguard Australia

Choosing an index fund: it's more than just expense ratio By: Duncan Burns Since the first index fund was launched some 45 years ago, millions of investors across the world have taken advantage of this easy-to-implement investment vehicle that offers transparency, diversification, low-costs and tax efficiency. Read More

The market rebound you may have missed By: Tony Kaye If you blinked in late March, you may have missed it. But that was the time when global equity markets started to reclaim lost ground. Read More

Beyond the pandemic: What to expect from shares, bonds The COVID-19 pandemic has drastically altered the economic landscape, and with it our forecasts for long-term market returns.  Read More

VANGUARD IN THE NEWS 3 ways COVID-19 changed the ETF market Emma Rapaport | Morningstar | 4 June 2020 ETF investors were taken on a rollercoaster ride in the March 2020 quarter as markets reacted to the worsening coronavirus outbreak. Investors took advantage of the equity price free-fall in March to boost their allocation to Australian equities. A dash to safety also attracted inflows to products with exposure to physical gold. Vanguard Australian Shares ETF (VAS) saw the highest net inflows over the quarter of $713 million, outstripping the next highest ETFS Physical Gold ETC (GOLD) at $280 million. To read more, please visit the Morningstar website. Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.

IN CASE YOU MISSED IT

Super returns and the importance of diversification By: Tony Kaye Ideally, self-managed investors also should have a combination of equities, bonds and other investment types to provide both growth and income over the long term, to have the best chance for investment success. Read More

Total return investing By: Robin Bowerman How can you design a portfolio that provides income to live off while preserving your capital across your retirement? Read More

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