Exchange-Traded Funds (ETFs)

Instant access to a diversified portfolio


Exchange-traded funds (ETFs) offer investors instant access to a diversified portfolio
of securities representing an index or a sector, but at a lower cost.

  • Track the performance of almost any asset class - be it shares, bonds,
    commodities or currencies
  • Diversify with a basket of securities


Do you know what indices are there in the ETF market?
Do you know the different types of exposure present in the ETF market?
Click here for our ETF Quick Reference Guide which will guide you in your answers to these questions.




Benefits

Price transparency

Enjoy intra-day price transparency on their listed exchanges, and see bid, ask and last done prices of the ETFs you trade.


Low cost diversification

Buying an ETF such as STI ETF (State Street) gives you instant exposure to 30 companies which constitute the index, without buying into each of the single stocks and incurring high brokerage fees.


Access hard-to-reach sectors

With ETFs, you can now readily access otherwise hard to reach assets and sectors, such as gold, oil or the China A-shares market.


Low fees and sales charges

ETFs have no upfront sales charges, compared to sales charges of 3-5% for unit trusts. It also requires lower management fees of less than 1% and goes by an intra-day pricing.


Exposure to a basket of securities

Compared to stocks which only give exposure to a specific company's performance, ETFs diversify your exposure to all the constituents underlying an index





Risks

Market risk

Investors are exposed to the price volatility of the underlying assets which the ETF tracks. Generally, where the price level of the underlying declines, the value of ETF declines as well.


Foreign exchange risk

If the traded currency of an ETF is different from the functional currency of the investor, the investor will be exposed to fluctuation in foreign exchange rates which may affect the returns on the ETF.


Counterparty risk

Synthetic ETFs, which replicate benchmark returns through the use of derivatives and swap-based instruments, are exposed to the risk of counterparties not fulfilling their obligations on those instruments.

Physical ETFs also have certain counterparty risks, as third-party custodians might have securities lending arrangements with other parties.







Selected information was taken from www.sgx.com

View commission rates and charges


Apply for an account to trade ETFs

Basic Trading (Cash) Account

Trade shares and other listed securities online or with a broker.

Share Financing Account

Increase your share buying power and boost your investments.

Share Borrowing Account

Borrow shares for short selling with up to 2 times leverage.

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