ETFs- why so popular?

I agree with @rehpot on the first note.

I personally prefer funds as they aren’t as easily tradable & 100% of your investment goes into a fund, whereas with ETFs your restricted to buying units at an ‘exact’ price.

So for example £50 a month investment into a fund is 100% invested. An ETF say @ £45 a unit is going to leave £10 / 10% of your money uninvested…

Rather than an S&P 500 ETF - I have US Equity Index Fund

Rather than VWRL - I have Global All Cap

The funds are slightly different to the ETFs as they also include small caps … But with very similar returns.

But to keep it simple & to not have to swap/change platforms. Freetrade offers a great array of ETFs with low fees suitable for every investor.

Funds are a personal choice & stop me from ‘tinkering’ with my portfolio.

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I don’t understand what you mean by fund vs etf investment. Both buy fixed parts and both should get fully invested. However, a fund might actually not invest if they actively choose to not to. ETFs always invest all.
Seems like you got that the wrong way round maybe?
Or do you mean closed funds? Which is btw something I would never invest much money into because you cannot sell easily.

Funds are much(!!) more expensive than ETFs as well and almost all funds underperform ETFs for the same market segment.

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I’m actually referring to ‘Index’ funds not mutual, sorry for the confusion.

I mean as in you can buy fractional units in funds and only whole units in ETFs.

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Closed-end funds are actually more liquid than open-ended funds (OEICs). For example you can still trade JPMorgan Russian Investment Trust (closed-end) even though trading is halted for pretty much every Russian ETF or OEIC. The issue is that Closed-end funds share price do not represent the value of the shares they hold. They can trade at a premium or discount to the net asset value

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I actually invest in ETFs rather than OEICs. My point’s more that the latter are much more set and forget which is perhaps psychologically easier. You can’t buy or sell them in a split second, for example. You also don’t need an app on your phone which takes away that temptation to tinker or check your portfolio daily.

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This is not necessarily true, although ETFs tend to be a shade cheaper it’s not a rule. As an example, Vanguard’s Ftse 100 unit trust is cheaper than its equivelant ETF. As a result, the former should outperform the latter. Many OEICs and unit trusts take a cheap, passive approach too.

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I buy funds with my other broker and yes, I like that when you invest £50, the whole £50 is invested into fractional units.

However, when compared to the instant buy/trade facility of ETFs, you do have to put up with the drawn out execution process:

  • You submit your dealing order to buy the fund
  • The order gets dealt by the fund manager at the next available valuation point (usually around noon but can vary). Your deal is now ‘awaiting confirmation’ and the price fixed.
  • The following day (but can take between 1-4 days), your order is executed and your purchase will appear in your portfolio.

Similar again when you sell.

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Elliot Wave theory is not the same as “astrology” . The underlining principle is that market behaviour occurs in waves and this pattern repeats itself such that we are able to predict future price action with a certain degree of accuracy. It is very difficult to understand for the new investor that’s why I put the two videos above so we learn from the professional.
Michael Filighera provides the Elliot Wave update on the S&P 500 and Nasdaq 100 on a daily basis on YouTube.
If we just look at any stock on a weekly or yearly basis you will see the pattern.

My L&G US Index Fund on HL has an ongoing charge of 0.06%.

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I understand what you mean about regular investing. But if you had bought the Nasdaq 100 in march 2000 at 4691 you would have waited until 2017 to reach the same value from its decline.
It could be very over valued now with all the central banks printing money.

I don’t think the OP wants to be staring at a chart all day every day. They want to know about investing and not trading.

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I’ve always found the TA stuff fascinating. Whilst I understand that certain patterns repeat and there are support and resistance levels, surely the stock market is fundamentally news driven? Just look at any stock around earnings - prices can move huge on positive or negative news. And then you have the global political news impacting everything. You could spend hours studying the charts to find a perfect entry and exit point but then if Putin presses the big red button to kick-off WW3 the charts are meaningless surely?

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