Comparison Between
ETFs, Unit Trusts & Stocks
ETFs
UNIT TRUSTS
STOCKS
Listing Status
Priced and traded continuously throughout the day
Based on forward pricing so one pricing a day, usually available 2 working days later
Priced and traded continuously throughout the day
Trading
Priced and traded continuously throughout the day
Based on forward pricing so one pricing a day, usually available 2 working days later
Priced and traded continuously throughout the day
Volatility
Lower as diversification from a basket of stocks cushion the volatility from an individual price swing
Lower as diversification from a basket of stocks cushion the volatility from an individual price swing
Higher as certain events can trigger major share price swings
Management of Investment
Passive management as ETFs seek to replicate the performance of its underlying index
Actively managed by dedicated fund manager who seeks to outperform its benchmark index
Active management by investor to track individual stock's developments and performance
Cost/ Expense Ratio
Brokerage charges Expense ratios usually below 1%
Sales Charge and Annual Management Fees
Brokerage charges
Liquidity
Yes, but varies according to the individual ETF
Not a concern as fund manager will create or redeem units
Expense ratios not applicable
Diversification Benefits
Yes
Yes
No
Counterparty Risks
Cash ETFs - No
Synthetic ETFs - Yes
No
No