Page 6 - FWP Wealth Adviser newsletter - July 2025: Issue 116

ISSUE 116
JULY 2025

Many active ETFs and diversified managed funds in Australia are
designed with these principles in mind, allowing investors to benefit
from professional research and disciplined portfolio construction
without the need to pick individual companies themselves.

Growth at a Reasonable Price (GARP): Accessible Growth for This approach provides diversification, liquidity, and the
Everyday Investors ability to invest in property with smaller amounts of capital,
Growth at a Reasonable Price (GARP) investing blends without the headaches of direct management.
the best elements of growth and value strategies. Rather
than hunting for the next big stock, Australians can access Active Stock Selection: Professional Management Over DIY
GARP through managed funds and ETFs that target quality While some investors enjoy the challenge of picking
companies with solid earnings growth, but at reasonable individual shares, most Australians are better served by
valuations. Many active ETFs and diversified managed funds professional management. Active ETFs and managed funds
in Australia are designed with these principles in mind, employ research teams to select stocks, aiming for outper-
allowing investors to benefit from professional research formance while managing risk. Blending active and passive
and disciplined portfolio construction without the need to approaches can offer balance, allowing investors to benefit
pick individual companies themselves. As Firstlinks notes, from professional insights without relying solely on their
“GARP focuses on buying blue-chip companies with growing own research.
earnings and dividends at reasonable prices”.
Thematic and Sector Investing: Targeting Trends Efficiently
Value Investing: Harnessing Professional Expertise Thematic and sector investing focuses on long-term
Value investing is about seeking out undervalued com- trends such as technology, healthcare, or sustainabil-
panies, but for most Australians, this doesn’t mean trawling ity. Thematic ETFs (for example, BetaShares Global
through balance sheets. Instead, value-focused ETFs and Sustainability Leaders ETF, ASX: ETHI) and sector ETFs
managed funds—such as the VanEck MSCI International provide targeted exposure to these growth areas. By using
Value ETF (ASX: VLUE)—offer a simple, diversified way to these funds, investors can participate in emerging opportu-
tap into this approach. By pooling resources and expertise, nities without taking on the risk of single-stock bets.
these funds help investors avoid concentration risk and
benefit from opportunities that may be overlooked by the Defensive Assets: Stability and Liquidity Through Funds
broader market. Defensive assets—such as bonds, cash, and gold—play a
crucial role in reducing portfolio volatility. Bond ETFs (like
Dividend Investing: Reliable Income Through Funds iShares Core Composite Bond ETF, ASX: IAF), cash manage-
For those seeking steady income, dividend investing ment trusts, and gold ETFs offer easy access to these assets,
remains a cornerstone of Australian wealth-building. Rather providing stability and liquidity during market downturns.
than assembling a portfolio of individual dividend stocks, As Firstlinks highlights, “Defensive assets such as bonds,
investors can access a basket of income-generating com- cash, and gold help protect portfolios during market down-
panies through dividend-focused ETFs like the Vanguard turns”.
Australian Shares High Yield ETF (ASX: VHY) or managed
funds. These vehicles not only provide regular income but Capital Preservation: Protecting Your Wealth
also allow for reinvestment, compounding returns over As investors approach major financial milestones or retire-
time. As Firstlinks states, “Dividends provide a steady ment, protecting capital becomes paramount. Conservative
income stream and can be reinvested to compound returns”. multi-asset funds and capital-protected ETFs are designed
to reduce risk and volatility. Gradually increasing allocation
Property Investment: Diversification Beyond Bricks and to these products can help ensure that hard-earned wealth is
Mortar preserved, even as market conditions change.
Property is a popular investment for Australians, but di-
rect ownership is not the only option. Listed property trusts Diversification and Asset Allocation:
(REITs) and property ETFs, such as the Vanguard Australian The Backbone of Resilient Wealth
Property Securities Index ETF (ASX: VAP), offer exposure to The true strength of these strategies lies in how they
a broad portfolio of commercial and residential properties. work together. Diversification across ETFs, managed funds,

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