“When your business is your life” – It’s a phrase agricultural families understand better than most. Yet, it also raises a key component of investment risk where a family may have all their wealth tied up in a single sector.

Investing outside a business you live and breathe could seem a distraction, or there’s simply no time to better understand new investment opportunities. While ensuring your business is well funded is a priority, spreading your wealth across a range of assets in different sectors, can not only do you smooth out long term returns, but can also protect your family wealth from a sudden shock, such as disease or flood, that could be devastating to a business with all its wealth tied into a single asset.

The returns can also be rewarding and perhaps surprising when viewed over the long term. As the table below shows the sharemarket was the stand-out long-term investment across a variety of asset classes.

As of 31 January 2025, $10,000 invested in 1985 is now worth:

Protect your family wealth through diversification

Improvements in technology (to spread risk) and share trading platforms have made it easy to buy and sell US and other international stocks, but an easier method that also offers instant diversification is to buy an exchange traded fund (ETFs). ETFs are managed by a professional fund manager, but fees are typically low as no stock selection by the manager is required.

You can purchase ETF’s that track just about anything of value, but if your goal is to diversify and reduce risk, an ETF following major sharemarket indices like the ASX200 (representing Australia’s top 200 listed companies) or S&P500 (representing America’s top 500 listed companies) is a good option.

In fact, along with the major indices you could, for example, have a selection of ETF’s following areas as diverse as artificial intelligence, defence, pharmaceuticals, commodities and venture capital or private equity. You can also start with as little as $1000 and starting or adding to your holdings is easy through a trading platform such as nabtrade.

If you are interested in the ETF route, as opposed to buying individual stocks, you can still get dividends and create an income stream.

A share-based ETF is made up of a selection of listed companies – typically an index that is tracked by the ETF. You don’t own the individual shares, but the ETF does. When dividends are paid, they are passed onto the ETF investor at a pro-rata rate to your ownership of the ETF. If Australian companies make up the ETF any available franking credits are also passed on.

ETFs are also valid investments for a self-managed super fund (SMSF) and we have a special offer for SMSFs getting set up to invest via nabtrade. View here.

To make investing even simpler, nabtrade, has partnered with global investment manager BlackRock to bring a range of global and local ETF’s to Australian investors. Click to Learn more.

A final note

Diversification is about getting a wide exposure to the economic and investment cycle, but it’s not just restricted to the sharemarket. A well-diversified investment portfolio may include property, bonds, gold, cash, private capital market investments and a range of other investments that perform differently over the cycles. It’s also considered good to have geographical diversification, which may also bring options for currency diversification.

It may sound complex, but the diversity level will also be driven by how much wealth you have to distribute over multiple assets.  No matter your circumstances, an investment portfolio that helps protect and grow wealth is achievable, and our NAB Private Wealth investment specialists can take you through the options available to suit your personal circumstances.

To discover more call 1300 683106, talk to your banker, or email us on investordesk@nab.com.au

Important information

The information contained in this article is believed to be reliable as at April 2025 and is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, property, financial and taxation advice before acting on any information in this article.

nabtrade is the information, trading and settlement service provided by WealthHub Securities Limited ABN 83 089 718 249 AFSL No. 230704 (WealthHub). WealthHub is a wholly owned subsidiary of NAB. WealthHub’s obligations do not represent deposits or other liabilities of NAB. NAB does not guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. You may be exposed to investment risk, including loss of income and principal invested.

©2025 NAB Private Wealth is a division of National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.