Advantages of index tracking ETFs

Cost efficiency

• Low expense ratio - as a passive investment, ETFs have lower operating expenses and lower management fees than an actively managed portfolio, resulting in a relatively low annual expense ratio.
• ‎Low operational costs - since its primary distribution is in exchange for securities packages of the same value as the distribution units, the proportion of fees charged on securities transactions is low.
• ‎Low trading costs - active market making at the stock exchange ensures spreads on the ETFs are narrower than in illiquid markets, making it inexpensive to buy and sell.
• ‎Low turnover costs - because it is index-based, the ETFs require fewer portfolio changes, resulting in significantly lower transaction costs than actively managed portfolios.

Index tracking

• ‎Transparency - to facilitate the BUX ETF's and CETOP ETF's unique creation-redemption process, the composition file for the given ETF creation unit is published daily. Since the ETFs's holdings are designed to reflect the performance of its underlying index, investors will essentially know the securities that are held in the given ETF and their weightings.
• ‎Diversification - because the BUX ETF and CETOP ETF track the given index, it provides diversification across the equities in the index.

Exchange trading

• Buying and selling flexibility - because it is exchange traded, the ETFs can be bought and sold at intraday market prices, purchased on margin, sold short, and - even on a downtick - traded using stop orders and limit orders.
• ‎Continuous liquidity - trading of ETFs is supported by continuous market making. The narrow spreads provided by the market maker ensure holders the opportunity to buy or sell the instrument at any time at low implicit trading costs.
• ‎All day tracking and trading - investors can track the given ETF price throughout the trading day and adjust portfolio holdings to capitalize on changes in the market.

Wide array of investment strategies

• Temporary investment: money can be placed in the ETF for the short term, even until the appropriate amount of capital is collected to implement the long-term investment strategy.
• Liquidity management: ETF is a quick and simple tool for placing temporarily free funds in the securities market.
• Realization of country, regional, sectoral exposure: through ETFs, exposure to a given country, region, or sector can be purchased with a single transaction.

ETFs on BSE Regulated Market: BUX ETF and CETOP ETF

ETFs on BÉTa Market

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