Competitive Advantages of Exchange Traded Funds
The following are several of the many advantages of ETFs:
1. Lower Costs-ETFs are known for having no fees. Some however, do have some minimal but much lower marketing, distribution and accounting fees. Most of them traditionally have lower costs than other investment products. They generally are not actively managed which excludes them from paying fees associated with buying and selling securities to accommodate purchases and redemption.
1. Lower costs: The majority of ETFs have zero fees. If they have any fee at all it will have much lower distribution, marketing and accounting fees than other investment products. They are generally not actively managed and are insulated from required costs of buying and selling securities to accommodate purchases and redemptions. They generally have lower costs than other investment products.
2. Flexibility to buy and sell: ETFs can be bought and sold at current market prices throughout the day, unlike mutual funds, which can only be traded at the end of the trading day. As a publicly traded security, shares can be purchased on margin and sold short, which allows the use of various hedging strategies. As a publicly traded security, they are also able to be traded using limit and stop orders helping investors to be able to specify prices at which they are willing to make trades.
3. Tax Efficiency: Because ETFs tend to have low turnover of their portfolio securities, they will generally have relatively low capital gains taxes. ETF's tax efficiency is increased because no securities are needed to be sold to meet investor redemptions. Also, their tax advantages are greater than that of most other securities.
4. Market exposure and diversification: ETFs add a more economical way to rebalance portfolio allocations and "equitize" cash by being able to invest it quickly. Investors are able to diversify across an entire index inherently though an index Exchange Traded Fund. Including broad-based indexes, broad-based international and country-specific indexes, industry sector-specific indexes, bond indexes, and commodities, ETFs offer exposure to a very diverse variety of markets.
5. Transparency: ETFs are priced at frequent intervals throughout the day, whether index funds or actively managed. Investors also have access to more transparency than that of traditional investment products. Their transparency is no doubt one of their strongest advantages. - 23196
1. Lower Costs-ETFs are known for having no fees. Some however, do have some minimal but much lower marketing, distribution and accounting fees. Most of them traditionally have lower costs than other investment products. They generally are not actively managed which excludes them from paying fees associated with buying and selling securities to accommodate purchases and redemption.
1. Lower costs: The majority of ETFs have zero fees. If they have any fee at all it will have much lower distribution, marketing and accounting fees than other investment products. They are generally not actively managed and are insulated from required costs of buying and selling securities to accommodate purchases and redemptions. They generally have lower costs than other investment products.
2. Flexibility to buy and sell: ETFs can be bought and sold at current market prices throughout the day, unlike mutual funds, which can only be traded at the end of the trading day. As a publicly traded security, shares can be purchased on margin and sold short, which allows the use of various hedging strategies. As a publicly traded security, they are also able to be traded using limit and stop orders helping investors to be able to specify prices at which they are willing to make trades.
3. Tax Efficiency: Because ETFs tend to have low turnover of their portfolio securities, they will generally have relatively low capital gains taxes. ETF's tax efficiency is increased because no securities are needed to be sold to meet investor redemptions. Also, their tax advantages are greater than that of most other securities.
4. Market exposure and diversification: ETFs add a more economical way to rebalance portfolio allocations and "equitize" cash by being able to invest it quickly. Investors are able to diversify across an entire index inherently though an index Exchange Traded Fund. Including broad-based indexes, broad-based international and country-specific indexes, industry sector-specific indexes, bond indexes, and commodities, ETFs offer exposure to a very diverse variety of markets.
5. Transparency: ETFs are priced at frequent intervals throughout the day, whether index funds or actively managed. Investors also have access to more transparency than that of traditional investment products. Their transparency is no doubt one of their strongest advantages. - 23196
About the Author:
Black Sand trading is an online stock trading tool that indicates to online traders where and how to invest their money. Black Sand's clients have consistently achieved a 53% or greater ROI over the past seven years following Black Sand's signal. For more information about trading and using Black Sand Trading visit our website.
posted by X - Men @ 2:51 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home