What are the cost advantages of investing in an ETF?

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  • What are the cost advantages of investing in an ETF?

In the case of digital assets, an Exchange Traded Fund (ETF) allows investors to buy and sell new financial instruments more easily. It offers investors the opportunity to integrate digital assets into their existing portfolios without requiring specialist knowledge or technical expertise. 

There are two types of funds available on exchanges:

  • A closed-end fund or trust is comprised of a fixed number of shares. Fund shares can trade at a premium or discount to the price of the underlying digital assets. Unit trusts are not traded on traditional regulated markets and typically have high fees. Lengthy notice periods for liquidating funds are common.
  • An open-ended fund, like an ETF, can create additional units for investors by buying more of the underlying asset. Underlying assets are priced in real-time, with the ability to buy and sell at any time. Open-ended funds have the advantage of being regulated and insured, making them more secure for investors.

ETFs provide a safe solution to invest in new financial instruments with ease.