General

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Let’s learn about ETF (Exchange Traded Funds) (1 minute reading)

  • A Pooled investment vehicle that offers diversified exposure of a particular area /theme of markets.
  • Across different asset classes: stocks, bonds, commodities, currencies, or a blend of assets.
  • Like a mutual fund but can trade at stock exchange during trading hours as a normal stock.
  • Passive ETFs are tracking the performance of underlying index

What kind of ETF can you choose? (2 minutes reading)

Index-based ETFs

  • Aim to track underlying index’s performance
  • Indices can be broad-based index such as Hang Seng Index, S&P 500 etc. or customized index such as thematic index or regional index

Commodity and currency ETFs

  • Through Physicals assets or future markets to gain exposure in relevant assets.
  • Commodity ETF includes oil ETFs, gold ETFs, silver ETFs etc.
  • Currency ETF includes RMB ETF, USD ETF or HKD ETF in Hong Kong.

Leveraged Products

  • Using futures or swap based to replicate the return.
  • Attempt to produce a multiplier of the daily return of their underlying benchmark.
  • Daily rebalancing, not suitable for holding more than one day.

Inverse Products

  • Using futures or swap based to replicate the return
  • Attempt to produce an inverse multiplier of the daily return of their underlying benchmark.
  • Daily rebalancing, not suitable for holding more than one day.