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Fahmiin

Back End Engineer at Seedly

10 Oct 2020

General Investing

How to "read" ETFs?

There are always a few common ETFs that people would advise to buy such as VTSAX, VTIAX, VOO and so on. My question is why are these considered good ETFs? How does one "read" ETFs like graphs, charts, numbers to determine the value of an investment? TIA!

Discussion (11)

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There are many things to look at in a factsheet before investing in a ETF. For me I will look at these things.

1) expense ratio. This is the fee(in percentage) the fund manager charge every year. Try to find fees which are below 0.4%pa.

2) I will look at the country and sector allocations. This will tell me whether this ETF is suitable for me. They usually show this through tables and pie charts.

3) I will look at fund size or AUM. This shows the size of the ETF and I will avoid smaller size ($400million and below). Low AUM usually mean lower liquidity which isn’t good. This is also to minimise the risk of the ETF closing.

4) The graphs are usually used to present the past performance. This give you a rough indicator of how the etf has performed for the last few years. ( BUT past performance is not equal to future performance)

5) Accumulating or Distribution. This shows whether the ETF reinvest( accumulating) the dividends or distribute them.

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Sharon

31 Jul 2020

Life Alchemist at School of Hard Knocks

This blog post by The Invest Quest would answer your inquiry and more:

The Ultimate Stock ETF List for SG Investors

https://theinvestquest.com/ultimate-stock-etf-l...

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There are several things to consider:

first step and most important:

#1 **asset alloca...

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