Ronel Talks Money: Exchange Traded Funds (ETF’s)
In this Ronel Talks Money Interview we discuss exchange traded products specifically focussing on exchange traded funds (ETF’s). Exchange traded funds can be seen as a hybrid between unit trust investments and investing in shares carrying benefits of both of these type investments. What are the pros and cons of ETF’s? Can you get global exposure? How to get started investing in ETF’s?
I talk to Nerina Visser, well-known as an ETF Strategist and Advisor with a specialist focus on exchange traded products (ETPs) and benchmark indices. She is a director of the etfSA Portfolio Management Company, where she oversees the management of specialist investment portfolios of ETPs for a broad range of clients. She serves as President on the board of the CFA Society South Africa and as chairperson of the ASISA ETF Standing Committee. She is a regular market commentator in the media and a seasoned speaker at conferences, seminars and workshops, in South Africa, throughout Africa and on the global stage.
A few of the questions we answer in this interview:
- Explain to us in layman’s terms what is an exchange traded product and the two types of ETP’s – exchange traded funds (ETF’s) and exchange traded notes (ETN’s)?
- What is the biggest difference between ETF’s and investing in shares or unit trusts?
- ETF’s would typically track indexes, but explain the concept of an index?
- What are the pros and cons of investing in ETF’s?
- Is it more suited as a short-term or longer-term investment?
- What are the risks involved and how can you mitigate risk?
- For somebody interesting in investing in ETF’s – how do you start and what is the minimum investment requirement?
- Is it easy to buy and sell ETF’s?
- What are the returns an investor can expect when investing in ETF’s?
- Can you get global exposure?
- What external factors can impact on the performance of ETF’s?
- How are ETF’s regulated?
- What are the costs / fees involved?
- Tell us about the tax implications and ETF’s as a tax-free savings investment option.