Have you ever considered investing in an exchange traded fund? Or maybe already you have, and though when you did, you weren’t quite sure exactly what it was you were investing your money in, everything you heard about it sounded fantastic, and made you simply decide, almost on the spot, to do it? After all, equity linked investments, for those with solid equity, and equity linked deposits sound pretty good, right? Well, there are a few things that you should know that may very well change your mind. Read on to find out the truth about Hong Kong ETF and exchanged traded funds in general.

The Ugly Truth about Exchange Traded Funds

There are quite a few down sides to ETFs that you may not have known about. That is, until now. Following are some of the most notable down sides to investing your hard earned money in exchange traded funds:

·         Market risk – political, economic and even social markets can greatly affect the quality and overall usefulness of investments made in ETFs

·         Liquidity risk –  secondary liquid markets have a greater chance of not existing for those who have invested in ETFs

·         Tracking errors – fees, expenses, liquidity and a variety of other factors may impact the net asset value of your ETF, negatively affecting the ETFs tracking index

·         Passive investments – in the case that a market goes down, or there is a plummet, your ETF will not assume a defensive stance; these investments are solely passive, making them very inflexible

·         Trading risk – the value of an ETF investment may not hold in the case of a trade; value may be appraised to be far less than actual value, leaving you with the shorter stick in a trade

·         Tax risks – your ETF investment may very well be subject to your state or even government taxes. Thus, you could find that you are having to pay extra taxes due to your investment, severely impacting the overall usefulness of the investment in a negative fashion

Better Solutions to Exchange Traded Funds Without Risk

FE Trustnet Hong Kong is aimed at providing independent information on mutual funds and MPFs to Hong Kong investment professionals and private investors. Over 2,000 local funds, and a suite of powerful tools designed to identify the best investment funds for your needs are at your disposal when you use Trustnet. You will receive a premier source of retail investment fund information from Trustnet, as well as a free suite of over 2000 local funds and powerful tools designed to identify the best investment funds for individual’s needs. Using Trustnet, you can ensure that your investment is very much worth the time and the effort you undoubtedly seek to put in to it. We all want our money to be used in the best ways possible. Trustnet offers you the means with which you can ensure that this is the case with your investment. Contact us directly to find out more about what we can offer you. 

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