ETF funds are incredibly low cost to maintain – if you wish to make a trade you could pay as low as 0.9% on the transaction value which is much lower than you would when transacting a mutual fund.
With mutual funds when you wish to sell you have to make your desire known during the trading day, after which at the close of the day the sale takes place. After this your money is sent to your account. A bit long-winded really. With ETFs however, you can either phone your broker who will sell or buy there and then, or you carry out the transaction online, instantaneously at the click of your mouse. Can’t get any faster than that now can it!
Further to this you can short your ETF. So for example if I have S&P 500 ETF
in my portfolio I can short it at any time or for that matter I can buy a put option and make a profit from any fall in the market while being protected from anything sinister happening.
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