Guide to ETFs: Understanding Exchange-Traded Funds

How ETFs Track Indices

Exchange-traded funds (ETFs) are investment funds that track indices. They offer liquidity advantages and can be compared with unit trusts in Singapore. Different ETFs can have different structures even if they aim to track the same underlying index; one example is a cash-based ETF.

Fees and Charges

Index-tracking ETFs generally have fees and charges that are lower than those of actively managed investment funds. This is because ETFs tend to have lower management fees, and there is usually no sales charge, although you may incur costs when buying and selling. Before investing, check with your financial institution whether the product you are considering is an SIP.