The Australian share market, or S&P/ASX 200 (ASX: XJO) (index: ^AXJO), has fallen 15% over the past six months.
That's more than likely terrible news for your portfolio and superannuation account, as many Australians are overexposed to the local sharemarket.
Unfortunately, many Australians refuse to invest in foreign sharemarkets due to both the complexity of opening a foreign trading account and, frankly, a lack of understanding and trust in sharemarkets more generally.
In the process however investors lose the opportunity to buy truly wonderful businesses like Apple, Microsoft, Coca-Cola, Google, Facebook, Berkshire Hathaway and many more.
Fortunately, not all is lost.
Step up: Exchange Traded Funds.
An exchange-traded fund, or ETF, is simply a pool of money which is controlled by an investment company to mimic the performance of all shares or assets in a particular group.
For example, the ishares Global Consumer Staples ETF (ASX: IXI) (ISGLCOSTP GDI 1:1) tracks the performance of the S&P Global 1200 Consumer Staples Index. Currently, the top holdings in the ETF include:
- NESTLE SA
- Procter & Gamble
- Coca-Cola
- PepsiCo
- Phillip Morris International
How has it performed?
Given the backdrop of a plummeting Australian dollar, the ETF has performed exceptionally well in 2015.
Data sourced from Yahoo! Finance.
But thanks to the recent volatility of global sharemarkets, I think ultra-long-term-focused investors can load up on shares of this ETF relatively cheaply – I recently bought some for my family's portfolio.
As icing on the cake, unitholders will also be entitled to a regular distribution from the fund.
That's why it's my #1 buy idea today.
