Overview

An exchange-traded fund ("ETF") is an open-index tracking fund listed and traded in real time on a stock exchange. It is made up of a collection of securities that tracks an underlying index. As ETFs are bought and sold on an exchange like shares, ETFs are priced and traded throughout the day.

ETFs have the combined benefits of stocks, unit trusts and index funds:

  • Easy access to diversification - own a basket of securities e.g.; an entire market, country or region with a single trade
  • Flexibility - buy and sell during trading hours just like a stock
  • Low cost - low management fee and zero upfront fee
  • Transparency - you have a first-hand view of what you are buying
  • Liquidity - investors can redeem units easily and obtain cash by the 3rd market day after trade date (T+3)
  • Affordability - for a small sum of money, you are able to invest in your desired securities investment

What are leveraged and inverse ETFs?

Leveraged ETFs deliver a multiple of the returns to a particular index on a daily basis. For example, if an index increases by 2%, a 2x leveraged ETF will increase by 4%. In comparison, inverse ETFs, deliver the opposite returns of an index, whereby if an index increases by 2%, the inverse ETF will decrease by -2%.

Appropriate for active traders in the stock market, inverse ETFs are suitable for investors with a bearish view of the market, whereas leveraged ETFs are suitable for those with a bullish view of the market. Both ETFs are for short term (one-day) trading.

Disclaimer:

Please read and understand the contents of the OnePRS Scheme Disclosure Document dated 20 November 2013 and Supplemental Disclosure Document (if any) before investing. The Disclosure Document and Supplemental Disclosure Document (if any) have been registered with the Securities Commission, who takes no responsibility for its contents. Units in the funds will only be issued upon receipt of application form and cheque. You should also consider the fees and charges involved. A copy of the Disclosure Document and Supplemental Disclosure Document (if any) can be obtained at our office or any of our authorized distributors. The price of units and distribution payable, if any, may go down as well as up. The past performance of the funds under the OnePRS Scheme is not an indication of its future performance. Investment involves risks including a possible loss to the principal amount invested. Please refer to the Disclosure Document and Supplemental Disclosure Document (if any) for risk factors for investments in the Scheme. If you are in doubt when considering the investment or on any of the information provided, you are advised to consult a professional adviser.

Kenanga Investors Berhad 199501024358 (353563-P). All rights reserved.
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