Importance

♤ ETFs are cost efficient. Given that they don’t make any stock (or security choices), they don’t use services of star fund managers.

♤ ETFs allow investors to avoid the risk of poor security selection by the fund manager, while offering a diversified investment portfolio.

♤ Stocks in the indices are carefully selected by index providers and are rebalanced periodically.

♤ ETFs offer anytime liquidity through the exchanges.

♤ ETFs provide easy access to asset classes by tracking the performance of underlying indices.