How to Invest in ETFs: Pro Tips from Invesco’s Expert

In our latest podcast, we sat down with Nima Pouyan, Head Institutional & ETF Distribution Switzerland from Invesco, one of the largest ETF providers globally, to discuss how ETFs could fit into a smart investment strategy. Here are the key takeaways! 

Why ETFs? A Market Trend That’s Here to Stay

“The ETF industry has exploded over the past decade, and it’s not slowing down,” says Nima. “Back in 2009, total European ETF assets were around 50 billion. Today, that’s sometimes the monthly inflow for providers.”

ETFs have become the go-to choice for both beginner and experienced investors. The reasons? Lower costs than mutual funds, transparency, and diversification. 

ETFs vs. Mutual Funds: What’s the Difference?

Nima explains: “An actively managed fund has a portfolio manager making decisions on which stocks to buy and sell. ETFs, on the other hand, simply replicate an index like the S&P 500.”

This means no fund manager is actively picking stocks, which reduces costs and eliminates human bias.

ETFs Key Benefits:

• Low fees: No high-cost fund managers involved.
• Diversification: Exposure to hundreds or thousands of stocks in one fund.
• Transparency: You always know what’s inside the ETF.

Beside the potential benefits, there are potential risks involved in any investment. The value fluctuation may partly be the result of exchange rate fluctuations and investors may not get back the full amount invested.

How to Choose the Right ETF for Your Portfolio

With thousands of ETFs available, how do you pick the right one? Nima suggests keeping it simple:

“A global Index like MSCI World or FTSE All-World could be an option for a core investment. If you want more exposure, you could consider to add thematic ETFs focused on tech, blockchain, or clean energy.”

Core-Satellite Strategy:

• Core: Broad ETFs (MSCI World, FTSE All-World, S&P 500) focusing at a long-term and stable basis.
• Satellites: Thematic ETFs (Tech, Clean Energy, Blockchain) focusing at selected growth opportunities.

A Common Misconception: Physical vs. Synthetic ETFs

Many investors prefer physically replicating ETFs because they seem more “real.” But as Nima points out, “Synthetic ETFs, especially for US stocks, are designed to offer major tax benefits by avoiding dividend withholding tax.”

So, don’t dismiss synthetic ETFs—they could provide better after-tax returns than physical ones!

Future Trends: What’s Next for ETFs?

🚀 Actively Managed ETFs – Combining the best of active management with ETF efficiency.

🌍 Sustainable & ESG ETFs – More investors are looking for ethical investments.

💡 Thematic Investing – Emerging trends like AI, blockchain, and China tech are growing.

Nima predicts: “Self-directed investing is booming. Platforms like UMushroom help investors educate themselves, making ETF investing easier than ever once an investor has assessed his risk appetite.”

Final Thought: Keep It Simple & Stay Invested

When asked for his best advice, Nima kept it clear: “Don’t overcomplicate it. A simple ETF portfolio can be the best long-term strategy.”

So, adjusted on risk appetite you’re new to ETFs or looking to refine your portfolio, the key takeaway is: start investing, stay consistent, and don’t chase trends.

Listen to the podcasts on your favorite platform:

▶ Spotify

▶ Apple Podcast

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Disclaimer:

This blogpost may contain advertising for a financial service or financial instruments. The blogpost and the information contained therein are for informational purposes only and for marketing purposes. It is not a financial analysis, investment advice, prospectus, offer, or recommendation to make investments or buy or sell financial instruments. The blogpost is not to be construed as legal or tax advice. UMushroom AG assumes no responsibility for contributions from third parties.

Investment Risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Other risks with ETFs are: use of derivatives, securities lending, equities, currency, stock connect, small companies, emerging markets. For complete information on risks, refer to the legal documents.

Important Information

This marketing material is intended for discussion purposes only and is directed exclusively at investors in Switzerland. This is marketing material and not investment advice. It is not a recommendation to buy or sell any specific asset class, security, or strategy. Regulatory requirements that demand impartiality in investment or strategy recommendations do not apply, nor do trading restrictions before their publication. Views and opinions are based on current market conditions and are subject to change. 

Data as at 28.02.2025, unless otherwise stated. By accepting this material, you consent to communicate with us in English, unless you inform us otherwise.

The views and opinions are based on current market conditions and may change at any time.

Issued by Invesco Asset Management (Switzerland) AG, Talacker 34, 8001 Zurich, Switzerland.