Getting to Know ETFs - The Investment Helper for General Investors

In an era where the economic market is highly volatile, many people are searching for safe investment methods that still yield good returns. This is where ETF (Exchange Traded Fund) plays an important role because it is a tool that makes investing easier than ever before.

What exactly is an ETF?

Simply put, ETF or Exchange-Traded Fund is a passport to systematic diversification of investments. Instead of speculating on a single stock, you invest in a group of stocks or assets simultaneously.

Asset Management Companies (AMCs) will generate returns for you through two channels:

• Capital Gain (Profit from price): When you buy at a low price and sell at a higher price, the difference is your profit.
• Dividend (Dividends): The fund distributes a share of income received, with the amount depending on the number of units you hold.

Types of ETFs investors should know

1. Equity ETF - Stocks bundled in one place

Invests in stocks from various companies. This document is suitable for those wanting to cover the entire stock market.

2. Bond ETF - Bonds for those seeking stability

If you want steady cash inflow, government bonds and corporate bonds together might be the answer.

3. Commodity ETF - Gold and commodities

For those wanting to bet on gold prices, oil, or agricultural products without holding the actual assets.

4. Sector ETF - Investment by sector preference

Love technology? Support finance? Choose the sector you believe will flourish.

5. International ETF - Expand into foreign markets

For those wanting to “put eggs” in more than one basket.

6. Multi-Asset ETF - The “all-in-one” wallet

Mix stocks, bonds, commodities in one place. Suitable for those seeking balance.

7. Inverse & Leveraged ETF - Tools for the brave

For those wishing to bet on downturns or leverage benefits from rising prices. (Be truly cautious of the risks!)

Why are ETFs good? 5 clear reasons

1. Smart diversification risk - Instead of betting on a single stock, you hold 50-100 stocks at once. Losing one isn’t a big deal because others support your portfolio.

2. No need to be a stock expert - Professional managers make decisions for you. You just sit back and enjoy the results.

3. Lower costs - ETFs have lower fees than mutual funds and individual stocks.

4. Convenient trading, like stocks - Open your streaming app and trade anytime during trading hours. No need to wait for market close.

5. Tax savings - ETFs’ unique structure results in less dividend and profit tax. Confirmed to pay less tax.

ETF vs stocks vs mutual funds - who wins?

In structure

• ETF: A fund listed on the market, traded throughout the day, with prices changing based on demand.
• Stocks: You become a real owner of a company, listed on the market, traded all day.
• Mutual Funds: Traded only through management companies, once a day, based on NAV (Net Asset Value).

In diversification

• ETF: Highly diversified, investing across asset groups.
• Stocks: Risk focused on that particular company only.
• Mutual Funds: Diversified like ETFs but may have higher fees.

In flexibility

• ETF: Can be traded anytime during trading hours; high liquidity.
• Stocks: Traded anytime; most liquid.
• Mutual Funds: Traded at end of day; less liquidity.

In costs

• ETF: Low fees + possible trading commissions.
• Stocks: Trading commissions + potential dividend tax.
• Mutual Funds: Higher fees + possible sales/redemption fees.

In tax efficiency

• ETF: Most tax-efficient due to its special structure.
• Stocks: May incur dividend and capital gains taxes.
• Mutual Funds: May distribute gains even if you haven’t sold units.

5 things to know before investing in ETFs

✓ ETFs have no minimum term - But since prices fluctuate with the market, short-term losses are possible. Patience and long-term perspective are key.

✓ Management fee - This fee is included in the price, no separate payment needed.

✓ ETF price may not match the reference index exactly - Due to management expenses, but the difference is usually minimal.

✓ ETF returns may be lower than high-growth stocks - But with lower risk.

✓ Choose ETFs that suit your plan - Not all are suitable for everyone.

Who should consider ETFs?

Beginner investors ✓ If you don’t yet know how to analyze stocks or understand income statements or market trends, ETFs are the best entry point. You don’t need to be a trader; just select a suitable fund and let professionals manage it.

Long-term investors ✓ If you want secure savings without worrying about daily price fluctuations, ETFs are tools that generate profits through dividends and long-term growth.

Balanced investors ✓ If you want savings but don’t want to take high risks, multi-asset ETFs help you achieve both.

Easy steps to buy ETFs

Step 1: Open a stock market account

Before buying ETFs, you must have an account. Contact a securities company or marketing officer to register.

Step 2: Choose your trading method

Method 1: Via streaming application

1. Log in to your streaming app.
2. Go to the “Watch” menu, then click “Favorite” → select “.ETFs”.
3. Search for the desired ETF.
4. Tap the “Buy/Sell” tab and select “BUY”.
5. Enter the number of units and price, then input your PIN.
6. Tap “BUY” to complete.

Method 2: Contact an officer If you need assistance, the company’s marketing staff can help you place orders and give trading advice.

Closing words: ETFs are a gateway to safe and systematic investing

For investors hesitating whether investing in ETFs is good, the answer is yes if you want to build sustainable assets with good risk diversification, affordable prices, and continuous returns. ETFs are what you’re looking for.

Long-term value does not come from winning at the moment but from staying in the game longer. Investing in ETFs is like building continuously, not relying on luck.

Start today by choosing the right ETF, and let it work for you over the long term. The returns will come steadily.