ETF (Exchange Traded Fund) In Malaysia
Exchange Traded Fund aka ETF is another investment tools which track index performance. It is the same as index fund in unit trust. The fund invest in a certain group of stock, bond or any market instrument and track its performance using index.
Combination of unit trust and stock
ETF is the combination of unit trust and stock. ETF is invested just as unit trust which gather the fund of investor and managed by a fund manager, just that it track according to the performance of index. If the index is rising, the market price also hike and vice versa. Therefore, fund manager is not aggressively managing the fund. ETF pose some similarity to stock because it is listed on the exchange and buy and sell through the trading platform. Therefore ETF is high volatility investment.
credit via bedrockcapital
How To Buy?
ETD is listed on Bursa Malaysia. ETF can be buy and sell through stock exchange just as buying a stock. ETF pricing can be monitored real time just through trading platform.
Charges for ETF?
Charges for ETF is the same as stock trading. You need to pay clearance fee, stamp duty, brokerage fee. ( You will also be charged by low management fee which depends on issuer)
Dividend for ETF?
ETF also paying up dividend just as unit trust (depends on ETF features)
Why ETF?
1. Diversify portfolio. ETF can invest in variety of company stocks. The risk is lower compare to a specific company’s stock. FTSE Bursa Malaysia KLCI ETF invest in top 30 largest company by market capitalization.
2. Low start-up. You can invest in variety of stock in the region with just one ETF. Buying several companies requires large amount of capital
3. Combination features of unit trust and stock. ETF pose liquidity, low management fees, diversify portfolio easily.
4. Transparency. You can view ETF’s underlying basket through Bursa website everyday.
Currently, there are just five ETFs listed on Bursa Malaysia. MyETF Dow Jones Islamic Market Malaysia Titan 25, ABF Malaysia Bond Index Fund and FTSE Bursa Malaysia KLCI ETF and two newly listed by CIMB, CIMB FTSE ASEAN 40 Malaysia and CIMB FTSE Xinhua China 25.
