In today’s financial market, there are many investment products to help you earn profits. In addition to investing in stocks and bonds, you can also invest in ETFs. In the UK, there are many different types of ETFs. In the following article, Learn Forex Trading will talk in detail about what is an exchange-traded fund and tell you which ETF funds you should invest in.
What is an exchange-traded fund?
what is an exchange-traded fund? It is a fund that operates based on replicating the fluctuations of reference indices such as stocks, bonds gold and silver… and indices. Or you can simply understand that an ETF is investing in stocks or bonds. It is designed to track index and asset values.
The ETF investment fund will gather all the different trading code categories of asset types. Then turn them into a single code and monitor the price fluctuations of that trading code portfolio to make profits. It’s the same as when you buy shares of the fund, but you won’t own the assets in the fund’s portfolio.
So which ETFs should traders invest in? Don’t rush, it will be revealed soon. Just keep following.
Characteristics of what an investment fund? Let’s find out below:
- Trade like stocks: You can sell ETFs every day on exchanges.
- Diversified fund investment portfolio: These can be stocks, commodities, gold, silver, or other assets.
- Buyers can receive fund dividends when investing.
- ETFs are flexible in selling and buying during the day on exchanges.
- ETF prices change every day.
- Has characteristics of both open and closed funds.
See more: What is Fomo? Does it make traders insecure?
Pros and cons of ETFs
As for investing in ETFs today, it will have its advantages and disadvantages. To invest in funds, traders need to clearly understand these things. Only then will you know which ETFs you should invest in?
Advantage
Join us to learn about the advantages of what is an exchange-traded fund.
- Investing with a diverse portfolio can help investors minimize major risks.
- Flexibility, and high liquidity: Because you can buy and sell during the day, you can rest assured about trading when you want.
- Transparency: When you invest in ETFs, these funds make information public. In particular, this is a completely legal form of investment, so all information must be made public.
- You do not have to pay tax when selling: With stocks and bonds when selling, you have to pay tax. But for ETFs, you will not be subject to taxes.
- No experience required: For ETFs, it does not require investors to have too much knowledge and experience.
Advantages of ETFs
Defect
Above are the advantages of ETF funds. And next, we will list a few disadvantages of what is an exchange-traded fund.
- Transaction fee: When investing in a fund, you have to pay a fairly large fee to the management company.
- Liquidity: Although transactions can be carried out during the day, it is not necessarily so. And sometimes you won’t even be able to buy or sell within the price range you want.
- Fast price fluctuations: Because we invest in a product portfolio, only one product needs to change. It will immediately affect the fund’s reference index price.
- There can be errors in simulation techniques, so there is a possibility that you will lose money if something goes wrong.
Which ETFs should I invest in?
If you are planning to invest in UK ETF. If you always don’t know which investment fund to put your capital in, please immediately refer to the ETF funds below and then decide.
ETF VFMVN30 – E1VFVN30
ETF VFMVN30 – E1VFVN30 is a type of fund that is highly appreciated by investors. Is an investment fund portfolio managed by Dragon Capital Fund company. One of the leading reputable fund companies in the UK. With many years of experience, the fund management team is very sensitive to the market, so it will help you earn profits when investing in the fund.
What is the information about this investment fund? Let’s see:
- Fund name: ETF VFMVN30
- Transaction code: E1VFVN30
ETF VFMVN30 – E1VFVN30
The fund simulates the VN30 stock market portfolio with a passive investment strategy. When the VN30 investment portfolio fluctuates, the fund portfolio also flexibly changes accordingly.
SSIAM VNX50 ETF Fund
SSIAM VNX50 ETF is an exchange-traded fund that replicates the VN50 index of the stock market. Includes an index of 50 stocks with market capitalization. High liquidity and market-leading free transfer rate. Basically, with those 50 stocks, it would account for about 75% of the stock market’s capitalization.
With a completely reimagined approach to what are passive fund investment strategies. Therefore, maintaining portfolio turnover will be lower, and therefore management costs will also be much lower than other active funds.
SSIAM VNFIN LEAD ETF Fund
ETF SSIAM VNFIN LEAD is an exchange-traded fund that simulates indices. Includes a minimum of 10 stocks in the financial sector index industry. Established in 2020, although new, the development speed is strong. With a portfolio of 10 types of stocks but accounting for 25% of market capitalization.
Use an automated investment strategy, which is a fully simulated method. And in the review periods, we will see that when the reference index changes, the fund also changes its portfolio according to general fluctuations.
See more: Instructions for registering an Exness account
VFMVN DIAMOND ETF
ETF VFMVN DIAMOND is a type of exchange-traded fund that replicates the VN DIAMOND index. Diamond stocks are available on the HOSE stock exchange. Ho Chi Minh Stock Exchange with criteria on Capitalization, transaction value, P/E ratio, and foreign investment ratio.
With a passive investment strategy, only focus on large stocks on the HoSE exchange. Established in 2020 but has so far achieved stable growth in price.
This fund has the advantage that the portfolio focuses on large stock codes, especially the majority of codes that are growing strongly in the market. Therefore it gives high profit performance. At the same time, the management fee is only 0.80%.
Which ETFs should I invest in? VFMVN DIAMOND ETF is worth investing in.
MAFM VN30 ETF
ETF MAFM VN30 continues to be an exchange-traded fund replicating the VN30 stock index. This is the leading index of the Exchange, synthesizing a list of businesses leading the market in terms of capitalization, having very high prices, and growing strongly in the market.
MAFM VN30 ETF uses passive investment strategies. There will be periodic changes in stock volume every 3 months and every 6 months.
Fund information:
- Transaction code: FUEMAV30
- Exchange: HoSE
- Transfer agent: UK CK Depository Center – VSD
- Fund management company: Mirae Asset UK Fund Management Company Limited
- Charter capital: 4,600,000 USD
The advantage of this MAFM VN30 ETF is that the investment portfolio often focuses mainly on leading codes on the hose exchange. Therefore, the level of risk is minimized. The management service fee is only 0.6%.
In addition, you can also learn about types of funds as well as what is financial investment through reference materials.
Epilogue
Above, Learn Forex Trading has shared with you the concept of what is an exchange-traded fund. At the same time, we also provide a list of ETFs worth investing in. So have you answered the question “Which ETFs should you invest in?”. Please refer to the ETF funds listed above and then choose which fund has the most potential to invest.
