MEDIA RELEASE As the debate over active vs passive continues to rage in Australia, differing views on the benefits of ETFs have often been confusing for investors trying to work out the best approach for their hard-earned savings.
With the launch of Active ETFs, a new dimension has been added to the debate – investors choosing an ETF now have the choice between active and passive strategies.
To help improve investor understanding of these different choices, Fidelity International has made an e-book available to all investors. Entitled: ‘Introducing Active ETFs’, it can be accessed through Fidelity International’s online learning hub: https://www.fidelity.com.au/learning-hub/discover-active-etfs/ .
Alva Devoy, managing director of Fidelity International in Australia, says the e-book shows how ETFs provide the characteristics investors are often seeking – access to active management, diversification and liquidity.
“Facilitating access to actively managed strategies on exchange, through the Active ETF vehicle, allows investors to build diverse portfolios in a straight forward and transparent way,” says Ms Devoy.
“Investors can decide which strategies suit their objectives best, be they active or passive, and combine these options easily to help them achieve the outcomes they are seeking, such as the opportunity to outperform the index and also to defend their portfolio against downside risk in periods of volatility.”
Active ETFs are relatively new in Australia having first launched in 2015. Since then, they have become part of the debate whether active or passive is the right approach for investors.
“This can be confusing for investors and their advisers when it comes to choosing ETFs,” she says.
“At Fidelity, we don’t believe it’s a case of active or passive. Active plus passive can be a great combination for clients, especially if keeping fees as low as possible is a priority for investors. At different points in the investment cycle, such as during increased volatility, a higher allocation to active may be more appropriate, while when all markets have fallen precipitously, a higher allocation to passive should achieve good returns for a lower cost.
“Already, Australians are seeking to increase the diversification of their portfolios. Active ETFs offer an easy way to do this, as many clients will already trade and hold individual stocks and shares. With an increasing number of Active ETFs now available, buying units in an actively managed fund can be done in exactly same way and the holdings can be shown side by side in one portfolio.
“We are committed to providing education to Australian investors on the benefits of this vehicle, especially in enhancing diversification of investments and also in providing risk adjusted returns.