5 reasons why ETFs might be right for you

by WisdomTree Investments

The exchange-traded fund (ETF) industry has seen tremendous growth, adoption and innovation
since its inception in the 1990s. Since then, ETFs have become the preferred investment vehicle for
many investors. Here are five reasons why ETFs might be right for you:


The ETF universe today covers a diverse range of exposures across asset classes, regions,  investment styles and themes. This broad offering makes ETFs great building blocks for a  well-diversified portfolio, providing investors with a powerful tool to select core and satellite  holdings to suit their individual investment goals. With the added ability to quickly and  efficiently adapt their positioning, investors can easily adjust the weights of their core,  satellite or cash holdings and also take on tactical positions to complement their long-term  allocations.  


ETFs are listed on one or more stock exchanges and traded just like company shares  meaning they can be traded as long as the relevant stock exchange is open.  

Cost Efficiency  

Most ETFs track an index with predefined rules which determine the composition of the  underlying securities and the timing and manner of periodic rebalances. This often makes  ETFs cheaper than actively managed mutual funds or investment trusts. Investors should  always consult the product documentation such as the Key Information Document (KID) for  a full breakdown of fees and charges.  


ETF providers publish the list of underlying constituents and associated weights for each of  their ETFs on a daily basis. This means that investors can see exactly what they own as well  as the effects of periodic rebalancing. In the context of a wider portfolio this allows an  investor to see how their underlying holdings interact across multiple investment products  allowing them to better manage gaps and overlaps.  


ETFs can be traded intraday and source liquidity from their underlying constituents. The  least liquid constituent of an ETF determines the ETF’s overall liquidity.  

Important information

Capital at risk. The value of your portfolio with InvestEngine can go down as well as up and you may get back less than you invest. ETF costs also apply.

This communication is provided for general information only and should not be construed as advice. If in doubt you may wish to consult a professional adviser for guidance.

This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon  as a forecast, research or investment advice, and is not a recommendation, offer or solicitation  to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as  of the date of production and may change as subsequent conditions vary. As such, no warranty  of accuracy or reliability is given and no responsibility arising in any other way for errors and  omissions (including responsibility to any person by reason of negligence) is accepted by  WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon  information in this material is at the sole discretion of the reader.

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