Category: Align Technology

reasons why you should invest in ETFs in Singapore

10 reasons why you should invest in ETFs in Singapore

ETFs in Singapore are an exciting and relatively new investment vehicle for the less experienced investor to get into. Often marketed as a way to diversify one’s portfolio, ETFs allow small investors access to indices such as the Straits Times Index (SGX: ^STI) without needing to deal with high brokerage fees or minimum investment amounts.

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ETFs for passive investment in a cost-efficient manner

The fees attached to ETFs under Singapore’s four leading fund houses are the lowest among all financial products available in this market. It includes annuity plans and insurance policies that do not beat inflation over long periods.

Access to markets across different geographies

ETFs track indexes that represent the equity markets of multiple countries simultaneously, allowing investors to gain exposure to foreign economies without having to invest overseas directly via forex trades or buy into single stocks on their own. Furthermore, diversification is achieved at meagre costs.

Ease of use with high turnover ratios

With just $1000 (SGD) needed to purchase an ETF in Singapore, the barrier to entry for investing is extremely low. The average turnover ratio of these funds in Singapore is very high at 1,326% per annum. It means that ETFs are relatively liquid and can be used to meet short-term needs due to their quick turnaround times.

Ability to trade throughout market hours

ETFs are traded within secondary markets like NYSE Arca or London Stock Exchange throughout the day, compared with traditional mutual funds, which only allow investors to buy into them through pre-defined opening hours on weekdays (excluding public holidays). They also open up stocks added during aftermarket hours, which conventional index funds cannot accommodate.

Tax efficient structure

One of the most attractive features of exchange-traded funds is their tax efficiency. Given that … Read More ...