Hello everyone! Today I’m going to talk about exchange traded funds, also called ETF. It may sound intimidating diving into the stock markets, in fact it’s very simple and accessible to everyone. I’ll try to explain it step by step and how you could benefit by following my approach.
As usual, what I write on this website is not financial advice, I always encourage you to do your own further research. If you’re in doubt about anything, it’s worth consulting a regulated financial advisor who would provide suitable tailor-made advices that match your circumstances.
This is a step-by-step approach to someone completely new to investing in ETF. The purpose of this post is to suggest a list of ETF to beginners starting their journey.
Step 1: Think about how long you want to put your money away for.
As a reminder from my previous post “How to get started with investing”, if you need your money back in less than 5 years, investing in the stocks market is probably not a suitable approach for you. There are plenty of other solutions for a shorter period of time.
Step 2: Think about how much money you want to invest.
Each person has different circumstances and objectives. If you’re lucky enough to have spare cash, it’s probably worth taking your time to think about how much you’re willing to put away for a long time.
Step 3: Think again about your risk-profile.
Investing in ETF means your money goes into the stocks market. When the markets falls, your money falls too. If you’re not prepared for this, then investing in ETF may not be right for you.
In short, investing in ETF is high risk profile. Over long time periods stocks market deliver higher return, however this may not always be the case.
Investing in geographical regions rather than specific companies or sectors is probably the easiest way to start investing.
World:
- Fidelity Worldwide Fund
U.S. 69.24% | Europe 8.76% | Europe ex Euro 5.2% | U.K. 4.63% Canada 4% | Other 7.36%
- iShares MSCI World UCITS ETF USD
U.S. 73.99% | Europe 7.39% | Japan 5.14% | Europe ex Euro 3.92% | U.K. 3.33% | Other 5.99%
North America:
iShares Core S&P 500 UCITS ETF
Vanguard S&P 500 UCITS ETF
Invesco S&P 500 UCITS ETF
Europe:
Xtrackers MSCI Europe UCITS
iShares Core MSCI Europe UCITS ETF EUR
Amundi Index ETF MSCI Europe UCITS
Emerging countries:
iShares Core MSCI Emerging Markets IMI UCITS ETF
Xtrackers MSCI Emerging Markets UCITS ETF
The list of ETF above is here to help you navigate the investment landscape when it comes to choosing the right product.
One thing worth remembering is that ETF are savings products. You can start with small amounts, and make regular small payments to grow your portfolio and savings.
I hope you enjoy reading this post, feel free to drop me a line to discuss further.
Cactus Personal Finance 
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