Welcome to another in the series “Under the Hood,” where we take a deep dive into the world of Exchange Traded Funds (ETFs). Today, we’re exploring the Betashares Global Shares ETF (BGBL), a fund that offers investors a cost-effective way to gain exposure to international equities.
The name ‘Betashares Global Shares ETF’ tells us a lot about the fund. ‘Betashares’ is the product issuer, ‘Global’ indicates that it invests in international assets, not just Australian ones, and ‘Shares’ signifies that the asset class is equities.
To understand more about BGBL, we head to the issuer’s website, the best resource for information on any ETF. Here, we find details about its purpose, the index it tracks, its fees, performance, and top holdings.
BGBL’s purpose is clear: it aims to track the performance of an index that provides exposure to approximately 1,500 developed markets companies (excluding Australia). The index it tracks is the Solactive GBS Developed Markets ex Australia Large & Mid Cap Index. This index is carefully constructed to select around 1,500 companies from developed markets, offering a diversified exposure to international equities.
When it comes to fees, BGBL stands out with its low management costs of just 0.08% p.a. That’s only $8 for every $10,000 invested. Low fees are crucial when building a long-term portfolio as they allow more of your money to stay invested and grow over time.
So, how does BGBL fit into a portfolio? It’s designed to be a long-term, core holding. It provides a convenient, cost-effective way to build a core portfolio allocation to global equities, with instant exposure to approximately 1,500 companies across 20+ developed market countries in one ASX trade.
Interestingly, BGBL complements the Betashares Australia 200 ETF (A200) quite well. While A200 invests exclusively in Australian shares, BGBL holds no Australian shares. Together, they provide broad exposure to developed markets, without doubling-up on holdings. This allows investors to choose their Australia/Global split for themselves.
In our episode titled “ETFs for Beginners: Basics 101 w/ Betashares”, we discussed the basics of ETFs. If you’re new to investing, ETFs like BGBL can be a great way to start. They offer diversification, which can help reduce risk, and they’re easy to buy and sell on the ASX. In our previous episode titled “Active ETFs: Active ETFs & Passive Aggressive ETFs”, we explore the difference between active and passive ETFs, and how to choose the right one for your investment strategy.
In conclusion, the Betashares Global Shares ETF (BGBL) offers a convenient, cost-effective way to build a core portfolio allocation to global equities. It provides instant exposure to approximately 1,500 companies across 20+ developed market countries (ex-Australia), in one ASX trade, and has management costs of only 0.08% p.a.
As always, it’s important to do your own research and consider your personal financial situation before making any investment decisions. For more information on ETFs, check out our episode titled “Basics: WTF is an ETF? ETF 101 Betashares”.