General FAQs
Here are some of the most frequently asked questions about iShares Exchange Traded Funds (ETFs). For further information, please consult your Broker or Financial Adviser.
Q1. What are ETFs?
Ans:
Like common equity shares, ETFs are liquid and trade like stocks. Like index funds, they offer the benefits of diversification, market tracking and low expenses, providing you with the exposure you need, the moment you need it.
Q2. How do ETFs work?
Ans:
ETFs are like open-ended mutual funds except that they can be bought and sold on an exchange like ordinary
stocks. Investors can purchase or sell them through their brokers during trading hours. iShares ETFs offer investors the benefits of investing in traditional mutual funds, with the convenience and flexibility that comes with trading ordinary stocks.
Q3. How do iShares ETFs make it easy to diversify?
Ans:
iShares ETFs are designed to track a specific index, making it easier to diversify your portfolios by developed
and emerging markets; by individual country and global exposure. And because you can invest in a range of geographies, sectors and styles in a single trade with iShares ETFs, risk can be diversified.
Q4. How do iShares ETFs provide investment transparency?
Ans:
iShares ETFs aim to reflect the performance of an index, which means that you know exactly what you are investing in. And because
holdings are disclosed on www.iShares.com.hk, you can see exactly what you hold in a given portfolio, at almost any moment.
Q5. Why are iShares ETFs cost-effective?
Ans:
As iShares ETFs are publicly traded, the buying and selling of iShares ETFs will inevitably incur transaction costs and brokerage
commissions if such trades are done through a broker. However, the management expenses for iShares ETFs are generally less than most traditional actively
managed funds. The savings from a lower management expense may help offset these costs.
Q6. Where can I buy and sell iShares ETFs?
Ans:
iShares ETFs are bought and sold in exactly the same manner as stocks. You can trade during market hours with real-time pricing, and
take advantage of changes in the market as they arise, so there is no need to open separate trading accounts.
Q7. Is the liquidity of an iShares ETF the same as its trading volume?
Ans:
The printed trading volume is not the same as an iShares ETF’s liquidity. Because of their open-end structure, iShares ETFs are as
liquid as their underlying stocks. This is due to the unique creation and redemption process inherent in ETFs.
