Australia is known as “The Lucky Country” due to its vast resources, relatively small population, and enviable (sometimes) isolation. Few countries rival it in production of gold or uranium for instance, too very precious resources indeed. Its population is educated and increasingly a center of culture. There is more to Australia than kangaroos, didgeridoos, and emus. Wise investors see the opportunities inherent down under. This article will show you how to invest in Australia easily.
The first way to invest in Australia is through mutual funds that specifically target the country. There are many to choose from. There are actually Australian mutual fund companies that know the territory better than anyone else. Three examples are The Australian Foundation Investment Co., Greenchip Funds Management, and Vanguard Australia.
Mutual funds do have hefty loads (commissions) however, and they have internal fees that can also sap your overall returns. I am not a huge fan of mutual funds generally, but there are some that are quite good. There are some great ones that focus on Australia.
One can also invest in Australian companies directly. There are thousands to choose from. Companies such as Qantas Airlines, Energex, and Australian Agricultural Company, provide good exposure to the smallest continent.
Australian stocks however are subject to all the risks that other stocks are subject to. Management can drive a company into the ground, a business model can become antiquated, etc.
I prefer to invest using ETFs, or Exchange Traded Funds. ETFs seek to follow benchmark indexes. For instance Ishares MCSI Australia, ticker EWA, seeks to follow the performance of the Australian stock market. This is a great way to invest if you think that the Lucky Country might be economically lucky in times ahead. It’s simple, which if you are investing overseas you need.
ETFs are also very low in cost. Typically the internal fees of exchange traded funds are near zero. Also one need not worry about paying a broker a large load. The only commission you will pay your broker is the relatively small one you incur when you buy or sell. If you do business with a discount broker the cost of such moves is also close to nothing.
ETFs for most investors are the easiest and lowest cost way to invest.