How to choose an ETF

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.

 


 

What is your investment objective?

Grow wealth over the long term
Grow wealth over the long term
Generate an income
Generate an income
Benefit from short-term market movements
Benefit from short-term market movements
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Time horizon Appetite for risk

Things to consider

 

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Find an ETF that tracks an index to reflect your investment strategy How much are you willing to pay to track the index you have selected? Make sure you know how your ETF is structured

Physical
Replication

Synthetic
Replication

The manager of the funds physically buys and holds all or a representative subset of the shares that make up the index The manager uses derivatives – a contract between two parties related to a particular asset – rather than physically buying the assets

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Positives

More transparent, easier to understand

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Positives

Enables access to markets and exposures that physical replication may not

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Negatives

Can limit access to certain markets and exposures

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Negatives

Counterparty risk – investors could be exposed to the risk that a single financial institution – the counterparty – may not be able to pay the index return
Sustainable investing
Sustainable investing
We look to debunk common myths within sustainable investing and highlight different ways to invest
Funds for your core
Funds for your core
Explore our range of funds built for the core of your portfolio
Megatrends
Megatrends
Learn about megatrends - a structural approach to investing
ETF Due Diligence

Things to consider when selecting an ETF

ETF Due Diligence Guide

Get started with the ETF Due Diligence >