ETFs are great tools to start off passive index investing, whether you want to follow the Bedokian Portfolio or other investment strategies and approaches. Before you jump right in, here are some considerations that you should take note of.
Consideration #1 – The Index
The index determines the make-up of the underlying securities of the ETF. Take the Straits Times Index (STI) for instance, both the STI ETF and the Nikko AM STI ETF track it, but there could be some slight differences between them, such as their proportions of the STI components and how closely the ETF tracks the index.
Additionally, you may also want to see the sector/industry exposure of the index, as well as regional/country exposure if applicable. This is important due to diversification.
Consideration #2 – The Structure of the ETF
I had mentioned earlier about physical and synthetic ETFs. Although in my ebook I had ...
...
