ETFs

  • Diversification: Owning an ETF allows investors to hold a basket of securities and have exposure across an entire index. An ETF offers the intraday trading opportunities of a stock with the diversification of a mutual fund. Diversification primarily helps reduce volatility and also has the potential to enhance your returns.
  • Low Expenses: Most ETFs are index based and not actively managed. Because of this, they are less likely to carry high management fees and usually have lower annual expense ratios than other investment vehicles.
  • Tax Efficiency: When ETF creations and redemptions are in-kind, it substantially lessens and possibly avoids capital gain distributions. In-kind distribution transfers with institutional investors lessens the possibility of the fund from incurring capital gains as a result of shareholder trades. However, the ETF structure does not necessarily eliminate all capital gains distributions.
  • Flexible: Any ETF can be bought and/or sold with the same flexibility as an individual stock. This allows investors to place stop-limit orders, buy on margin, or sell short. Any of these transactions would make them subject to the same terms that would apply to individual common stocks.
  • Transparency: Investors will know exactly what they purchase. The holdings of ETFs are listed on a daily basis, whereas mutual funds generally release their holdings quarterly. The transparency of the ETFs’ portfolios allows investors to easily obtain or hedge exposure to a specific group of securities.
  • Tradability: ETFs can be purchased or sold during the trading day. They are listed on an exchange, so it is easy for investors to buy or sell shares throughout the day. Because ETFs are listed, investors can obtain up-to-the-minute share prices, and trade the relevant index as though it were one single stock.

Recon Capital Partners Manages Exchange Traded Funds

Recon Funds