Advantages of ETFs

ETFs
iShares

Summary:  Choosing the right investment is like choosing a new car. You want a safe option that is good value and reliable, and something that suits your needs. We will explore some advantages of ETFs and reasons why they are a great way to invest, including transparency, index performance, access, liquidity and diversification.


ETFs diversify your investment and lower risk

With one simple trade, buying an ETF gives you instant diversification. It’s important to think about diversification if you want to reduce risk while maximising returns. ETFs offer investors greater diversity than simply buying individual stocks.

ETFs match index performance

Investments are never guaranteed but ETFs track indexes to help take the guess work out of investing. There are no surprises

ETFs are transparent so you know what you are getting

Generally, ETFs are transparent, because you can always see what the underlying investments in the ETF are. This is not always the case, for example in a managed fund, where the portfolio manager has the discretion to choose not to reveal the investments in the fund.

ETFs make accessing markets easy

There is usually an ETF for whatever you are looking to invest in, from a country in southeast Asia to an asset class like global bonds—and even commodities like gold. For investors who would like to invest in difficult-to-access markets such as emerging markets, it now becomes straight forward by investing into an ETF.

ETFs are easy to trade

Since ETFs trade on the exchange, you simply buy and sell your ETF via your broker, at the market price., with no minimum purchase requirement.

Bonus: The annual management expenses for ETFs are typically lower than those of managed funds

In summary, ETFs are the better way to invest because...

They’re low cost.
And usually much cheaper than mutual funds.

You know what you’re getting.
They’re transparent and you can see the underlying investments.

They offer the best of both worlds.
The diversification of a managed fund with the tradability of a stock.

There are no surprises.
You know a good ETF will aim to closely track the performance of the underlying index it invests in.

They make accessing markets easy.
With one trade you get exposure to a whole range of assets.

 




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