SMSF Investing – ETFs
ETF Trading Tips (part 2)
by David Bassanese
(Ed: note this is part 2 of a 2 part article. Part 1 provides some basic background information for SMSF trustees that are new to ETFs, while part 2 provides the more specific tips for trading ETFs).
The following is a list of trading tips to help SMSF trustees wanting to get involved with investing in and / or trading ETFs:
1. Avoid placing at-market buy orders before the market opens, as you are likely to get poor prices. That’s because market makers have a hard time pricing an ETF before the market has opened for at least 10 minutes or so – as it takes that long to get valid market prices for all the stocks within an ETF. The same holds true near the market’s close. The best times to buy ETFs are when the market is being actively traded in the middle part of most days.
2. Don’t be scared by apparent low volumes for sale/offer for some ETFs listed though, say, on online broker. The mid-point of the best buy/sell prices offered by the market makers should generally reflect the net asset value of the stocks underpinning an ETF.
ETF Trading Tips (part 1)
by David Bassanese
(Ed: note this is part 1 of a 2 part article. Part 1 provides some basic background information for SMSF trustees that are new to ETFs, while part 2 provides the more specific tips for trading ETFs).
Exchange traded funds (or ETFs) are among the fastest growing financial products in Australia. An ETF can be bought and sold on the ASX just like an ordinary company share, and offers indexed exposure to a range of domestic and international benchmark equity indices at relatively low cost.
The State Street SPDR S&P/ASX 200 ETF for example, trades with the ticker code STW, and offers exposure to the Australian S&P/ASX 200 index at an annual management fee of only .286%. There is now also a range of Australian-based sector ETFs available, covering the resources, metals and mining sector, financials, industrials, and energy sector.
