ETF: Good to know

ETFs’ advantages are compelling and include:

  • Lower cost – expense ratios much lower than managed funds

  • Tax efficiency – rebalances within ETFs portfolios are CGT free

  • Transparency – the investor can see all the stocks in the portfolio

  • Highly diversified – typically more stocks in an EFT than a managed fund

  • More liquid – investors can trade ETFs on most stock exchanges with very low spreads (managed funds have wider buy/sell spread)

  • Market breadth - most globally listed stocks are held by at least one of more ETFs