What to consider when buying ETFs

Capital at risk. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.

 


There are two main considerations when choosing an ETF; the cost and the risks associated.

Cost of ETFs

ETF icon 1 ETF icon 2
Transaction cost
The buying and selling of an ETF can be done through a broker or a fund platform which involves a fee that is usually calculated as a percentage of the transaction price.
Annual management fee
This is a yearly fee charged by the fund manager or provider to cover the cost of managing the ETF.

Risks associated with investing in ETFs

Type of ETFAssociated Risk
ETFs that hold securities in foreign countries subject to exchange rate movement
ETFs that hold securities in emerging markets and commodities can be subject to more extreme market conditions
ETFs that hold securities in bonds sensitive to interest rate movements
Capital at risk all financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.
Ensure you fully appreciate all the risks associated with investing in ETFs including the specific risks of any fund before you invest.

 

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