Exchange-traded funds (ETFs) have become increasingly popular among both institutional and retail investors over the years due to their unique characteristics such as diversification, liquidity, and cost efficiency (To learn more about the product features of ETFs and the differences to mutual funds, please read the article: “What is the difference between mutual funds and ETFs”). While most traditional ETFs are passively managed, the rise of actively managed ETFs has added another layer of appeal, expanding the investment options available. These actively managed ETFs combine the structural advantages of ETFs with the potential for outperformance through active management (To learn

First of all, it needs to be said that mutual funds and exchange traded funds (ETFs) are collective investment vehicles which are in many jurisdictions regulated within the same regulatory framework. This means both kinds of products are different ways to deliver an investment strategy to the investor. The key differences between a mutual fund and an ETF are related to their product structure, buying and selling of shares, transparency, and fees and expenses: 1. Buying and Selling of Shares The shares of mutual funds are normally bought and sold only once a day, at the fund’s net asset value

In my article “What is Investment Risk” I discuss the single risks which can appear when investing in the securities markets. That said, the article does not touch upon the fact that investment risk is divided into two broad categories: systematic and unsystematic. Every investment is impacted by both types of risk, though the risk composition will vary across securities. Systematic Risk The systematic risk of a security or asset type is associated with the overall market. This risk affects every security, and it is unpredictable and undiversifiable. Nevertheless, the systematic risk of a single market/asset type within a portfolio can