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email: info@cladegroup.com
tel: +27 (0)21 423 6940
tel: +27 (0)21 423 6940
Exchange-Traded Funds (ETFs)
ETFs are securities certificates that state legal right of ownership over part of a basket of individual securities. Typically ETFs aim to replicate and track an established benchmark index, such as a bond or equity index by investing directly in the underlying security in the same proportion as represented in the index.
Over US$300 billion invested in ETF’s globally
Investments in exchange traded funds have grown dramatically since Standard and Poors launched the Standard and Poors Depositary Receipt in 1993. Over the past year alone, worldwide investments have increased by US$100 billion – an annual growth rate of approximately 40%.
Advantages of ETF's
- Liquid. An investor can buy or sell the ETF at any time, with the market maker guaranteeing liquidity. Investors can buy and sell ETF's conveniently through a local broker.
- Low cost. ETFs are typically low cost passive investments. The Govex's costs are intended to be less than 3 basis points (0.03%) of the index value. This equates to approximately 0.60 bps on yield.
- Full transparency. Investors can see exactly what is held in the underlying assets, and can convert the ETF to these underlying assets.
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