ETF FAQ
Exchange Traded Fund (ETF) is a type of investment fund and exchange traded product that tracks the performance of an index or a “basket” of securities (such as shares, bonds, commodities, etc.).
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ETF Target market
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About Exchange Traded Funds (ETF)
- Investors who are looking for benchmark return at a minimal cost
- Investment professionals seeking efficient access to other markets and asset classes.
- Passive investors who may not have time to actively monitor the market
- Investors looking for diversification through a single security
An Exchange Traded Fund is an investment vehicle that tracks an index, a basket of assets, or a commodity, but trades like regular shares on a stock exchange.
Trading costs:
- Buying = 1.1325% of consideration amount
- Selling = 1.4775% of consideration amount
- CSCS alert fee+VAT of 4.30 is also applicable per trade clip
Since they trade like stocks, liquidity for an ETF is a function of the underlying securities. For example, when you buy an ETF that tracks the NGX 30 Index, it gives you ownership and the performance of all the securities listed in the NGX 30 Index.
- Other than the offer period, the ETF has no minimum investment
- The ETF will trade continuously throughout the trading hours unlike mutual funds that trade based on closing prices
- The total expense ratio of the ETF is lower than conventional mutual Funds
No. The ETF is exposed to similar risks as the underlying securities.