Exchange Traded Funds (ETFs)
What are some of the main benefits of Exchange Traded Funds (ETFs)?
- Accessibility: You can purchase or redeem units in an ETF at any time during market hours in the same way as you would for any ordinary share. This means no additional paperwork or unnecessary delays like with unlisted managed funds. ETFs also have no minimum investment
- Transparency: Unlike a traditional actively managed fund that discloses its holdings at varying intervals, ETFs are highly transparent. Most ETFs are required to publish a list of their holdings on a daily basis.
- Cost effectiveness: As ETFs are generally designed to track a specific index or other rules-based methodologies, fees are (on average) lower than a traditional actively managed fund.
- Liquidity: Given their open-ended structure, an ETF can be as liquid as its underlying constituents.
- Diversification: ETFs are an easy way to achieve a high level of diversification that retail investors are unlikely to achieve by themselves