ETF Advantages

Advantage
01
Trading and settlement of the ETF are the the same as those of securities. Investors are able to trade ETFs by their securities trading accounts with a brokerage house, with no additional accounts required.
Advantage
02
Many ETFs charge lower annual expenses than even most comparable index mutual funds. Unlike mutual funds which require the support of a research team for each individual stock, ETF managers only has to passively adjust the constituents in the portfolio by tracking and monitoring the pulse of the market. Therefore, the fee is lower than the typical mutual funds. Furthermore, as the trading and settlement of the ETFs are the same as that of a stock trading while the transaction tax in only 1%, much lower than that of a stock trading.
Mutual Fund ETF
Management and Marketing 1~3% 0.3%~0.8%
Transaction Tax 0.3% 0.1%
Total 1.3%~3.3% 0.4~0.9%
Advantage
03
For most ETF’s, the uptick rule has been eliminated, so selling the ETFs is as simple as saying “long”or “short”. And most importantly, shorting an index is less risky than shorting an individual stock.
Advantage
04
Because each ETF is comprised of a basket of securities, it inherently provides diversification across an entire index, thereby reducing investment risk.
Advantage
05
ETFs are designed to tracking indices and the information of the constituent stocks of the Benchmark Index, performance comparison between the Benchmark Index and other important data and information may be downloaded from TSEC and fund house websites. In addition, because trading and settlement of the ETF are the same as those of securities, the trading hours, exactly the same frequency as the updates on the Index. ETFs do not sell or redeem their shares at net asset value NAV. Instead, the share price is determined by the market.
Advantage
06
Since ETFs are not restricted by the uptick rule, they are often used by hedge funds. Hedge fund managers are looking to make fast trades to take advantage of short-term price movements. Subsequently, an ETF;s exclusion from the uptick makes it an attractive investment to hedge fund managers.