Exchange traded funds (ETFs)

If you are a busy profession who have no time for stock research but would like to build a diversified investment portfolio with global exposure, then exchange traded funds (ETFs) may be for you.

Generally, there is still a lack of awareness among retail investors on this class of investment probably because ETFs passively track indexes. Thus, it may take the thrill out of stock picking. Nonetheless, ETFs offer an alternative path to seek returns from the market.

Broadly speaking, ETFs is a type of collective investment scheme that pooled money from investors and invested according to the fund’s objective. In a way, it is similar to unit trust. However, the main difference between unit trust and exchange traded fund is that the former is actively managed by professionals while the latter passively track a specified index. Because of this, ETFs are open-ended investment funds and are traded on a stock exchange…

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