Exchange Traded Fund (ETF)

Was attending a ETF seminar at Singapore Exchange on a sat morning on managing portfolio with ETF. It was organized by SGX, AmFraser and Lyxor where it highlighted about the use of ETF to diversify and adding to your investment portfolio.

An Exchanged Traded Fund is an open-ended investment fund listed on a stock exchange. It's aims is to track the performance of and index or commodity price, buying and selling ETF units on a stock exchange

The parties involved in an ETF include

a) Fund Manager
b) Stock Exchange
c) Participating Dealer
d) Market Maker
e) Custodian & Trustee

Advantages of ETF are

i) Lower transcation cost of brokerage fee and management fee
ii) Intra-day pricing and trading flexibility
iii) Liquidity provided by market maker

The presentation also highlight that most of the fund managers are not able to beat the performance of the benchmark index. So why not consider to be your own fund manager and invest in Exchange Traded Fund, paying less sales commission and management to beat the performance of most mutual fund manager instead

Singapore Exchange ETF Official Site