Exchange-Traded Funds (ETFs) – Self Invest | QSuper (2024)

FAQs

How many ETFs should I have in my Roth IRA? ›

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

Exchange-traded funds work like this: The fund provider owns the underlying assets, designs a fund to track their performance and then sells shares in that fund to investors. Shareholders own a portion of an ETF, but they don't own the underlying assets in the fund.

The QSuper Balanced Accumulation option returned 3.6% for the December quarter and 6.48% over the year to December 2023. Longer-term returns remain solid, with the QSuper Balanced Accumulation option posting a return of 6.7% p.a. over the 10 years to the end of December 2023.

From 1 July 2023, the Self Invest option will no longer be offered to new investors.

SPY, VOO and IVV are among the most popular S&P 500 ETFs. These three S&P 500 ETFs are quite similar, but may sometimes diverge in terms of costs or daily returns. Investors generally only need one S&P 500 ETF.

The disadvantages are complexity and trading costs. With so many ETFs in the portfolio, it's important to be able to keep track of what you own at all times. You could easily lose sight of your total allocation to stocks if you hold 13 different stock ETFs instead of one or even five.

Lower dividend yield

Some ETFs pay dividends, but investors may receive higher returns on specific securities, such as stocks with large dividends. That's partly because ETFs track a broader market and therefore have lower yields on average.

ETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.

The majority of individual investors should, however, seek to hold 5 to 10 ETFs that are diverse in terms of asset classes, regions, and other factors. Investors can diversify their investment portfolio across several industries and asset classes while maintaining simplicity by buying 5 to 10 ETFs.

On 28 February 2022, Sunsuper and QSuper merged to become one super fund: Australian Retirement Trust.

What is the best performing balanced super fund? ›

Hostplus Balanced is the best performer over the 10 years to December 31, 2023 with an average annual compound return of 8.3 per cent. Second spot is shared by AustralianSuper Balanced and Australian Retirement Trust Super Savings Balanced, each with an average annual compound return of 7.9 per cent.

Australian Retirement Trust is the new fund name for the QSuper/Sunsuper merger.

We're honoured to have received SuperRatings' 15-year Platinum rating. QSuper returns are driven by our investment approach that aims to provide consistent growth over the long term with less risk. 6.70% p.a.

QSuper Self Invest gives you the control to manage your super by offering you the choice of Australian shares, exchange traded funds (ETFs) and term deposits. An ETF is a pre-mixed portfolio of investments selected and managed by investment professionals. Types of ETFs can include: 3 funds with exposure to asset.

Typically, ETFs have lower fees than mutual funds, making them a cost-effective investment. ETFs trade on an exchange like stocks, which provides flexibility for more active investors. Growth and income ETFs can be a good fit for a Roth IRA because all investment gains are tax free when you withdraw funds.

Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.

Ideally, a strong portfolio will contain a single U.S. stock index fund, which provides broad exposure to U.S. economic growth, and a single U.S. bond index fund, which provides exposure to relatively safer income-generating assets.

Assuming you do go down the road of picking individual stocks, you'll also want to make sure you hold enough of them so as not to concentrate too much of your wealth in any one company or industry. Usually this means holding somewhere between 20 and 30 stocks unless your portfolio is very small.