“The resource sector has again outperformed on a yearly basis with investors in our Metals & Mining ETF enjoying returns of 21%, almost double that of the ASX 200 index,” said Annmaree Varelas, Aii CEO.

This is consistent with the long-term trend for resources, with the Metals & Mining, Resources and Energy sectors all outperforming the ASX 200 over a five-year period.

Local ETF researcher, PennyWise Investment has for the last 12 months taken an overweight position in resource-based ETFs within their model portfolios, and their view isn’t likely to change in the near future.

“Although commodity prices are likely near their peak for the next year or so, the demand profile facing Australian resource companies remains strong and valuations are far from expensive.  The local resources sector also retains good relative price momentum in global markets, and remains among our preferred ETF exposures within our satellite model portfolio,” said David Bassanese, Managing Director of PennyWise Investment.

“Sector ETFs can maximise portfolio returns with income and growth opportunities. An investor seeking higher income could look to invest in the Aii Financials x-A-REITs ETF with a grossed up yield of 8.22% or capitalise on long-term growth with the resource ETFs,” said Ms Varelas.“In both instances, it takes away the guess work for investors over which stock to pick, minimising the stock specific risk in portfolios.” said Ms Varelas.

“Research has shown 70-80% of a stock return is generated by the market and the sector, not the stock. So taking a market view by picking the right sector, you are 70% of the way there,” said Ms Varelas.

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