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Confused in what to check before buying GGUS ETF
First Time Investor
Hello friends, I am very new to investing; so just wandering around on what to check before investing in ETF’s. I am interested in GGUS ETF but as compared to other ETF’s, it’s growth is very weired 25.49% annually. Please advise friends
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Gurleen Kaur
Asked on 28 November 2024
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Hi Gurleeen,
You should probably inform yourself about leveraged ETFs like GGUS before diving in. I wrote an article about this here which might help: https://pearler.com/explore/learn/blog/levera...
Cheers, Dave
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Hello! It’s great to see your interest in investing in ETFs, particularly in the GGUS ETF. When considering an investment in ETFs, there are several key factors you should evaluate:
Performance History: While past performance is not always indicative of future results, it provides insight into how the ETF has managed under various market conditions. GGUS, for instance, has shown a significant annual growth rate of 25.49%, which is attractive. However, it’s important to compare this with its benchmarks and similar ETFs to understand the context of its performance.
Volatility and Risk: The standard deviation is a measure of the amount of variation or dispersion in a set of values. A higher standard deviation indicates more risk. For GGUS, the standard deviation is notably higher than that of the broader market, which suggests higher volatility and potentially higher risk. It’s crucial to assess if you are comfortable with this level of risk in relation to the potential returns.
Costs: Look into the expense ratio of the ETF, which affects your net return. Higher fees can eat into your investment returns over time, so it’s beneficial to choose ETFs with reasonable fees.
Investment Strategy: Understand the investment strategy behind the ETF. GGUS focuses on the US market, which has performed differently compared to the Australian market. Ensure that this strategy aligns with your investment goals and portfolio needs.
Diversification: ETFs can offer diversification across various assets, but the level of diversification varies. Check how diversified the GGUS ETF is and whether it meets your needs for spreading risk.
Economic and Market Conditions: Current and anticipated economic conditions can affect ETF performance, especially in region-specific funds like GGUS. Consider how shifts in the US economy might impact
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