ETF can invest more cheaply than general fund due to direct investment in ETF has no sales fees and commissions. In addition, the operation is also restricted to a passive portfolio management because marketing costs are not relatively high.
General fund cannot check its composition in real time, but; ETF can check its basic composition portfolio, such as HTS, etc., in real time. Also, by posting selected ETF's setting and revocation status, promoted clarity.
Diversified investment is possible with small sum.
Purchase in one week, can see the effect in the all of index’s events is similar to investing.
Index of all events is similar to investing in, you can see the effect. Thus, the microfinance also able to invest in whole market include bond or crude that hard-to-reach asset investment by enabling investors to help the dispersal of investment.
EFT, listed in the stock exchange market, is identical to the index-fund in that it follows up to the flow of specific index, providing superior cashability with selling and purchasing any time just like the ordinary shares. Investors can decide on when to resell and repurchase discretionally on a business time.
There is no redemption fee in ETF.
fund charged total redemption fee when redeemed within certain period of time, but ETF may trade freely without the redemption fee.
ETF conservative system is cheaper
ETF can invest more cheaply than general fund due to direct investment in ETF has no sales fees and commissions.
ETF provides a higher liquidity
Compared to the ETF, which are traded on the Exchange and LPs maintain high liquidity by making markets through arbitrage, general funds consist of over-the-counter trading, which makes real-time trading impossible.
ETF minimizes the operating funds costs.
In order to respond to market changes and repurchases, general funds require frequent trading, incurring high trading fees. ETFs, on the other hand, require less change in portfolios, writing down the unnecessary trading fees.
ETF is more transparent.
ETF's operational and portfolio is announces on a daily basis via the homepage, etc.
EFT, securer and safer by diversified investment
Intensive investment in individual shares can be exposed to excessive price fluctuations, whereas EFT, in the same effectiveness as investment in sector or the whole index set, can expect comparatively lower investment risk with automated diversification effect.
EFT, less trading cost
Sale of shares imposes transaction tax, whereas EFT can be exempt from it even with shares composed as underlying asset. (It is subject to change with the tax system revision.)
EFT, LP (Liquidity Provider) assisting you
It is difficult to invest in ordinary shares with low trading volume, whereas EFT, assisted by LP selling and purchasing on behalf of you, can be sold and purchased with any volume of shares.
|Real time transaction in the market||O||O|
|Investment Risk||Double difficulties with market risk plus risk diversification on individual shares||Market risk|
|Diversified Risk||A certain amount of investment required for risk diversification||Only small sum of investment leading to higher risk diversification effect|
|Trading cost||Security transaction tax (0.3%) levied when selling shares||Security transaction tax exempt (as of April, 2013)|
|Sector & Style Investment||A certain amount of investment required for achieving investment target||Every strategy available|