ETF is an acronym for Exchange-Traded Fund and is intended to be funds that hold a range of securities for different types of assets but are traded, i.e., the units of these funds can be purchased and sold directly through financial market (exchange).
Whether you are investing in real estate, company's stocks, bonds, or other types of assets, ETFs offers many advantages over others, most notably:
- Ease of purchaseSince ETFs are funds listed in the financial markets, this naturally facilitates the method of purchasing their units through brokers and instantly by placing buy orders.
- Possibility of immediate liquidationThe financial markets are characterized by the presence of a seller and a buyer, supply and demand, this allows selling easily as well, instantly and at the market price. Compare it with the way you invest by buying and selling real estate, for example, where you have to wait a long time and do different procedures to find the right property and then a long period and multiple procedures to sell it!
- Minimal tracking effortWhether you invest in active ETFs or inactive ETFs, the way you invest in ETFs doesn't require much effort from you to track your investments, as the fund manager in whom you invest does so for you.
- Easier to chooseThe process of choosing between hundreds of shares and thousands of real estate requires you to have a great financial analysis skill for it and for the sectors in it, unlike investing through exchange-traded funds, you buy a large group of securities combined by one idea such as buying in all tech companies within a single purchase.
- Diversification and risk mitigationETFs are characterized by having a large group of securities underneath, and once you enter into one fund, you have invested in hundreds, if not thousands of them at once, and this reduces the risk of investing in a specific company in a specific sector or a specific type of property in only one region.
Baraka is regulated by the Dubai Financial Services Authority (DFSA).
Past performance is no guarantee of future results. Your investment can fluctuate, so you may get back less than you invested. Consider each product’s risk(s) before investing.
Baraka is not a financial adviser and therefore does not provide investment advice. Our content is informational only.
