Could anyone let me know how ETF works? What do I need to know or take note of before starting on investing in ETF? Which ETFs are the most recommended ones? - Seedly
 

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Asked by Anonymous

Asked on 01 Jul 2018

Could anyone let me know how ETF works? What do I need to know or take note of before starting on investing in ETF? Which ETFs are the most recommended ones?

ETFs

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Kenneth Lou
Kenneth Lou
Level 9. God of Wisdom
Answered on 03 Jul 2018

Hi there :) This is a pretty good question. I will start with a simple one:

Exchange Traded Fund (ETF)

  • An ETF is a passively managed investment fund which is traded on the stock market

  • Passively managed because it just tracks the index (for example, buys the top 30 companies based on a certain allocation) hence lower fees

  • Traded on stock market indicates that it has high liquidity of buyers and sellers, which is a good thing for investors

You can actually read more about one of the more common ETFs bought in Singapore the STI ETF: Singapore's leading index fund.

Here: https://blog.seedly.sg/how-to-sti-etf-a-simple-way-to-invest-in-singapores-top-30-companies/

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