The Complete Guide to Exchange-Traded Funds (ETF) for Beginners
Through the years exchange-traded funds or ETF had taken the investing world by storm. Primary reason for this is its unique characteristic which provides investors a new investment vehicle to choose from. But what is “ETF” exactly? And how does it work? Here at First Metro Asset, we’ve gathered information to give you a complete guide to exchange-traded funds (ETF) for beginners.
What are the advantages in investing in an ETF?
ETFs offer the opportunity to invest in a portfolio of securities that provide the same diversification benefits of mutual funds with the liquidity and trading flexibility of stocks.
What should you do before investing in an ETF?
An investor should evaluate his investment objectives and horizon. It is crucial to begin by taking the time to evaluate your goals; considering whether such investment meet your particular needs.
What happens to the dividends when you invest in an ETF?
The dividends may either be paid out by the ETF or reinvested into the fund.
Will I be able to outperform the index if I invest in ETF?
The main goal of ETF is to track an index. Its objective is to mirror the current index. It is a passive fund hence should generate returns similar to the index.
What are the risks involved when it comes to investing in ETF?
As with any other investment vehicle, your ETF investment will also be dependent on favorable market conditions and subject to market volatility.
How much is the minimum investment for ETF?
When you trade ETF shares in the market, you will be bound by the minimum board lot size which is prescribed by the PSE. Minimum board lots depend on the price of the ETF shares. For block orders, the minimum investment amount should be equivalent to 10,000 shares.Interested in ETF, but still have questions? One of our skilled Relationship Manager is ready to assist you and guide you thoroughly on how investing in ETF can help you in reaching your specific goals and objectives. Fill out the form below to get connected:
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