ETF News

ETFs 'cut the hassle' for long-term investors

Investing to get balanced exposure in equities and bonds can be "hard work" and a nerve-wracking experience for many but vehicles such as exchange traded funds (ETFs) can take some of the legwork out of the process, while reducing the impact of market volatility, an expert has said.

Writing in Investors Chronicle, Nick Louth said shares can be "highly volatile" but over the long-term, they tend to perform strongly once dividends are reinvested.

So despite the past decade being "miserable" for equities, it is worth having some exposure to shares - and ETFs can reduce the impact of bad news or poor company results by giving investors access to an entire sector or market.

This instant yet diversified access to a basket of securities means investors do not have to spend hours "digging through stock screeners, identifying likely share purchase candidates, checking Ebita and cash flow and reading annual reports", as they would with a single stock, Mr Louth said.

At the end of July, there were 753 ETFs in Europe with 1,890 listings on 20 stock exchanges. They had combined assets under management worth $183 billion (£112 billion).

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