Three ETF myths busted
ETF myths that could cost investors money | Tim Bradbury
Are ETFs really just passive investments? Is the cheapest ETF always the best choice? And does low trading volume mean an ETF isn’t liquid?
In this video, Tim Bradbury, Head of Intermediary Australia at State Street Investment Management, unpacks three of the most common ETF myths he encounters when speaking with Australian investors.
💰 The key question: What misunderstandings about ETFs could lead investors to make poor investment decisions?
✅ The short answer:
Many investors incorrectly assume that ETFs are only passive investments, that the lowest-cost ETF is automatically the best option, and that low trading volumes signal poor liquidity. According to Tim Bradbury, all three assumptions can be misleading and may result in suboptimal investment choices.
In this video you’ll learn:
• Why ETFs are no longer just passive investment vehicles
• The growing range of active, factor and ESG ETFs available to Australian investors
• Why management fees are only one part of the total cost equation
• What “total cost of ownership” means for ETF investors
• How ETF liquidity actually works
• Why trading volume doesn’t tell the full liquidity story
Why it matters:
ETFs have become one of the most popular investment vehicles in Australia, but common misconceptions can cause investors to overlook opportunities or misunderstand the risks and costs involved. Understanding how ETFs really work can help investors make more informed portfolio decisions.
⏱️ Timestamps:
00:00 Introduction: The three biggest ETF myths
00:00 – 01:00 Myth #1: ETFs are only passive investments
• Growth of active ETFs
• Factor investing strategies
• ESG and sustainable ETFs
• More than 350 ETFs available on the ASX
01:00 – 02:00 Myth #2: The lowest-cost ETF is always the best option
• Looking beyond management fees
• Understanding tracking error
• Evaluating ETF managers and benchmarks
• The importance of total cost of ownership
02:00 – 03:35 Myth #3: Low trading volume means low liquidity
• Understanding ETF liquidity
• Primary and secondary markets
• The role of market makers
• Why ETFs are often more liquid than they appear
Featured expert:
Tim Bradbury Head of Intermediary Australia State Street Investment Management
Podcast Links:
Listen on Apple Podcasts: https://apple.co/3mV0Cbr
Listen on Spotify: https://spoti.fi/3fSPI2h
Website: https://moneymag.com.au
Email: podcast@moneymag.com.au
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