: Which instrument to use to trace the Aussie Stock Market? The best way to achieve market returns is to get into a product that traces the market, right? So I have found two such potential products to trace the ASX 200. The

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If your goal is to achieve market returns, the appropriate product is the SPDR 200 Fund. This is appropriate if you are investing for weeks, months, or years.

You should think long and hard before using leveraged ETFs, such as the CitiFirst Australian Index MINIs. They are definitely the right tool for some investment strategies, but are generally a poor match for buy-and-hold. Investopedia.com has a great article on leveraged etfs. In summary, you may want to use them to capitalise on daily movements.

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I think it depends on what your strategy is.

I think if you are looking at a buy and hold strategy the ETF might be a better option.

However, if you were trying to time the mark and had a shorter term view, then the MINI would be better as it allows you to go long when the market is rising and short when the market is falling.

There would generally be a higher risk with the MINI due to the gearing, but this is somewhat minimised due to the in build stop loss, meaning your losses are limited to the stop loss level. The gearing also allows you to free up capital to invest elsewhere.

I think whichever product you use you should educate yourself fully on all the aspects of that product before using it, and have an appropriate strategy for that product. You should never go into any investment with your eyes closed.