ETF stands for "Exchange-Traded Fund." It is an investment tool similar to stocks but different from traditional mutual funds. The unique feature of an ETF is that it can be traded on an exchange, just like stocks. In contrast to individual stocks, an ETF represents a basket of assets such as stocks, bonds, or commodities. This means that when you buy one unit of an ETF, you actually own a small portion of multiple assets within it.

ETFs can be bought or sold when the exchange is open for trading. In Hong Kong, exchanges typically open at 9:30 am and close at 4:00 pm. You can use your securities account to trade ETFs through the exchange. It is important to keep an eye on market volatility and trading volume to ensure you get a reasonable price when trading.

Investing in ETFs offers several advantages over investing in individual stocks. Firstly, ETFs provide better asset diversification. Since an ETF represents a basket of assets, you can achieve broader asset diversification within a single investment, thereby reducing risk. Secondly, ETFs typically have lower management fees, meaning you can achieve diversification at a lower cost. Additionally, ETF trading offers high liquidity, allowing you to buy or sell during market hours, enhancing flexibility and convenience.

Choosing the right ETF for you involves considering several factors. Firstly, you should determine your investment goals and risk tolerance. Some ETFs focus on specific industries or regions, while others offer broader market diversification. Secondly, you should consider the ETF's fee structure and performance track record. Look at indicators such as management fees and tracking error to understand the cost and performance of the ETF. Feel free to consult uSMART investment advisors for professional advice to gain more information and recommendations about ETFs.

nvestment aims to achieve capital growth over an extended period. As ETFs represent diversified asset portfolios, they can provide the asset diversification and stability needed for long-term investment. Additionally, ETFs generally have lower management fees, which is an important consideration for long-term investors.