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ETFs(Exchange traded funds)
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Posts: 159 Forumite
Do these have any extra risk attached compared to funds investing directly in stocks and shares.Ie do they lack liquidity,would they be hard to sell in a falling market.
I can't see any downside but would welcome inputs from more experienced MSEs. Thanks
I can't see any downside but would welcome inputs from more experienced MSEs. Thanks
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Do these have any extra risk attached compared to funds investing directly in stocks and shares.Ie do they lack liquidity,would they be hard to sell in a falling market.
No, quite the opposite, as they are listed shares and liquid at all times.It is the unit trust trackers that would be prone to this kind of problem.Trying to keep it simple...
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Yep, agree with Ed; they are more liquid than unit trusts, though it remains to be seen how they would fare in a severe downturn.0
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EdInvestor wrote: »No, quite the opposite, as they are listed shares and liquid at all times.
However, there are a limited number of market makers for ETFs.
This can lead to the bid/offer spread widening, even when the NAV is fairly constant.
This problem is worsened if people put stop losses on ETFs.0
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