At Best ETFs, we categorise Diversified ETFs and Multi-Asset funds as separate types of funds. Both types of ETFs invest in similar asset classes (Australian shares, global shares, bonds, cash, property, etc.), but they go about it differently.
Diversified ETFs
Diversified ETFs invest in other ETFs, use index/passive strategies, generally have low costs (below 0.5% per year) and have target allocations (e.g. 70% growth, 30% defensive).
Multi-asset ETFs
Multi-asset ETFs also invest across multiple asset class (shares, bonds, cash, property, etc.) in one fund/ETF. However, they tend to use active or ‘dynamic’ strategies, have higher fees, often use derivatives and use a ‘go-anywhere approach’.
