Reasons why Invest with ETFs

Exchange Traded Funds or ETFs are the perfect amalgamation of unit investment trust and the valuation feature of mutual fund. The ETFs can be purchased or sold at any point of the day. It is not obligatory for the investors to buy or sell the MLP ETF at the end of the trading day. Trading of ETFs is conducted globally today and there are many reasons why invest with ETFs.

Let us find out why invest with ETFs.

It has the safety with diversity and it is the primary benefit associated to ETFs. Any investor can buy ETFs and this entitles the investors to claim a small stake in many companies. This type of fund actually comprises several related stocks and when an investor buys an ETF then it means that they have a small take in many companies. So, without buying different equities and the hassles of keeping track of many equities, the investors can enjoy small take in many companies by buying one single ETF.

ETF trading gives complete control over the trade. The investors are allowed to sell or buy ETFs at any point of the trading day. The investors can also find the real quotes for selling and buying these ETFs on the trading day. It is totally up to the trader if they want to sell or buy the funds at the available quote.

Tax efficiency is another advantage due to which many people prefer to invest with ETFs today. This type of fund generates very low capital returns compared to other investment vehicles. This is because it has very low turnover of portfolio securities. Moreover, in ETFs investors are not required to sell securities so as to meet the redemption, thus it is tax effective.

The operating expenses of ETFs are very low. Moreover, the investors are not required to pay the operating expenses. The portfolio managers are responsible for deducting the fee from the pool of portfolio they are managing.

ETFs are considerably safe and hence make it is the best investment vehicle of today. These were some of the reason why invest with ETFs instead of other investment vehicles.

Source : https://alerianmlpetf.tumblr.com/post/121904274875/reasons-why-invest-with-etfs