We shared about Active vs Passive investing where we highlighted how ETFs make great passive investment tools. But what do ETFs really entail and what should you look out for in an ETF?
What are Exchange Traded Funds (ETFs)?
An Exchange Traded Fund is a basket of assets such as stocks, commodities, or bonds that trade on an exchange like the Singapore Exchange or Hong Kong Exchange. ETFs often track an underlying index that could be based on an Index or industry.
ETFs can be a cost-effective way of investing your money passively. They share characteristics similar to mutual funds and stocks. Like a mutual fund, an ETF provides easy access to a portfolio of stocks or bonds and offers diversification through a single security. Similar to a stock, an ETF can be bought or sold throughout the course of a day as long as the stock exchange is open...