Guide to ETFs: Understanding Exchange-Traded Funds
Learn how ETFs track indices, their liquidity advantages, and how they compare to unit trusts in Singapore.
What Are ETFs?
Exchange-traded funds (ETFs) are investment products that track specific indices. They offer liquidity advantages, and in Singapore, they are often compared with unit trusts.
Costs and Fees
Index tracking ETFs tend to have fees and charges that are usually lower than those of actively managed investment funds. This is because ETFs have lower management fees and there is usually no sales charge when you buy and sell.
Important Considerations
Before investing, check with your financial institution whether the product you are considering is an SIP (Securities Investment Product).
There are different ways to structure an ETF even if its investment objective is to track the same underlying index. One such structure is the cash-based ETF.