facebookWhat considerations are there for choosing ETF or funds that track the similar stocks or REITs? - Seedly

Anonymous

18 Apr 2019

SeedlyAMA

What considerations are there for choosing ETF or funds that track the similar stocks or REITs?

Not sure how to choose between different funds (e.g. nikko am versus SPDR); are management fees the main consideration?

AMA First Investment

Discussion (2)

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Nicholes Wong

01 Feb 2019

Diploma in Business Management at Nanyang Polytechnic

They are not very big difference however lower the fees higher your profit. Another things you can consider are tracking error and volume. Tracking error is the difference between the benchmark and the ETFs after all its not easy to 100% track a index so choosing a lower tracking error etf would be better. Low volume etfs are less liquid and have bigger bid-ask spread.

Kenneth Lou

01 Feb 2019

Co-founder at Seedly

Hi there! Good question.

I would consider a few things:

1) Invest in what you are more familar with.

Is it the companies that make up the STI Index?

Or is it REITs and real estate and you believe that the Real Estate market is doing well and sustainable?

2) Do you want to take on a more passive or active method?

Active: Means you actually need to go and pick out REITS. There are REIT ETFs but here is an answer between REIT and REIT ETFs which was found here:

"Personally I'll avoid the reit etf and just buy the individual reit counters. The Etf gives a lower return and there's management fees involved. I'll suggest going through a simple course on reits like the one from Dr Wealth to gain a basic understanding of reits before you start investing. You can also start doing dca into individual reit counters via maybank ke's monthly investment plan once you know what counters you are going for. Hope this helps"

Passive: You can simply start on the STI ETF and buy the index fund. It buys into the 30 companies that form the STI index.

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