Exchange Traded Funds (ETFS)

ETFs give you instant access to a diversified portfolio

Why you will love this

Get instant access to a diversified portfolio of securities representing an index or a sector

Track the performance of almost any asset class - be it shares, bonds, commodities or currencies

Online application

using Myinfo

For individual customers who are 21 years old and above

or

Offline and corporate application

at a branch or via mail

For individual customers who are 18 to 20 years old, foreigners who do not have Myinfo and corporate customers.

Why Trade ETFs

Price transparency

Enjoy intra-day price transparency on the listed exchanges. You can see bid, ask and last done prices of the ETFs.

Access hard-to-reach sectors

With ETFs, you can now readily access otherwise hard-to-reach assets and sectors, such as gold, oil or the China A-shares market.

Low cost diversification

ETFs give you instant exposure without incurring brokerage from buying each stock. For example, the STI ETF which constitutes 30 stocks lets you own a portion of all these companies at once.

Low fees and sales charges

ETFs have no upfront sales charges and have lower management fees (generally less than 1%) compared to sales charges of 3-5% for unit trusts.

Risks

Market risk

Investors are exposed to the price volatility of the underlying assets which the ETF tracks. Generally, where the price level of the underlying declines, the value of ETF declines as well.

Foreign exchange risk

Investors may be exposed to fluctuation in foreign exchange rates if the traded currency of an ETF is different from the functional currency.

Counterparty risk

Synthetic ETF where use of derivatives and swap-based instruments are involved, may be exposed to counterparty risk if obligation is not fulfilled.

Lion-OCBC Securities Singapore Low Carbon ETF

Open an account to start trading ETFs

FAQs
Common questions
Comparison with mutual funds and shares
ETFs vs. mutual funds
ETFs Mutual funds (unit trusts)
No sales charge Charge a sales charge of 3-5%
Charge lower management fees of less than 1% Management fees of 1-2%
Offers intra-day pricing End-of-day pricing

Shares vs. mutual funds
ETFs Shares
Allows exposure to a basket of securities Allow exposure to one company
Small management fee No management fee
Normal brokerage and standard charges
Underlying assets, performance and liquidity

ETFs come with various underlying assets, like equities, commodities, bonds and currencies.

ETFs’ performances are based on the underlying assets and benchmark, and the function of the fund manager is to track as closely to the underlying assets and benchmark as possible, thereby reducing the tracking error.

Liquidity is provided by the market-maker assigned by the issuers and in addition, the market participants add on to that amount of liquidity.

Citing an example in Hong Kong, 2823HK has an average daily traded volume of 60 - 100 million shares per day, with certain intra-day change in price of a few percent depending on the underlying.

Therefore, ETF is an investment tool that day / trend traders can use for their short-term trading needs with the liquidity and volatility it presents.

ETF Quick Reference Guide

Do you know what indices are there in the ETF market?
Do you know the different types of exposure present in the ETF market?
View our ETF Quick Reference Guide which will guide you in your answers to these questions.

You may also like