Benefits

Risks

• Easy to trade

An ETF is tradable through licensed brokers anytime during trading hours and is settled in the similar way as stocks/shares.

• Market risks

An ETF is exposed to the economic, political, currency, legal or other risks inherent in a specific sector or market that affects the performance of the index being tracked by the ETF.

• Low cost

An ETF is traded in board lots which are usually maintained at an affordable level. It also offers a wide array of securities for a minimum investment.

• Tracking error

This refers to the difference between the performance of the ETFs (as measured by its NAV) and the performance of the underlying index. Depending on a particular ETF's strategy, it may not hold all the constituent securities of an underlying index in the same weightings of the index. Therefore, the performance of the securities underlying the ETF may outperform or underperform the index and this will be reflected in its NAV.

• Diversification

By investing in an ETF, you can replicate the gains and losses of the basket of securities it is designed to track without incurring the expense of buying all the underlying securities yourself.

• Liquidity

An ETF is continuously traded on the exchange during trading hours.

• Transparency

The underlying index and constituent securities of an ETF are transparent, and price quotations are disseminated during trading hours. In addition, trading information of an ETF is easily accessible on a real-time basis.

Before you invest in an ETF, read the prospectus and pay close attention to the following:

Information about the index that the ETF is tracking (e.g: KLCI, bond index, etc.)

• The ETF’s investment objective and strategy
• The fees, charges and trading costs borne by the investor
• The ETF’s dividend policy
• Information on the management company
• The channels through which trading information of the ETF will be made available or disclosed.

After reading the prospectus and other relevant materials, and considering your investment objectives, risk appetite and the amount of funds available, you can then decide whether the ETF is suitable for your investment needs.