Exchange Traded Products (ETPs) can be benchmarked to countless investments including commodities, currencies, stocks, and bonds which usually track an index. There are two types of ETPs which include Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). ETPs are similar to mutual funds in that they’re made up of a basket of securities. The main difference between Exchange Traded Products and mutual funds, is that ETPs are traded like individual stocks on an exchange where mutual funds are not.
ETPs are priced and can be purchased and sold throughout the trading day, and you can buy or sell ETP shares on a stock exchange much like the purchase or sale of any other listed stock. Traditional Exchange Traded Products are generally not actively managed and, typically generate fewer capital gains.
Gaining more and more popularity are Exchange Traded Funds (ETFs), which offer pooled investment product options, similar to that of a mutual fund. As mentioned previously, ETFs are actively traded throughout the day like a stock, unlike a mutual fund which trades after markets have closed. ETFs are passively managed and as a result, offer lower expenses and fees compared to that of a mutual fund.
Benefits of Investing in ETPs
Exchange Traded Products encompass a number of investment structures that track an underlying benchmark, index, or portfolio of securities. A comprehensive financial plan can help forecast lifelong cash flow needs, illustrating all the money you will receive and spend in your lifetime. Illustrations use prudent assumptions to protect against inflation and use realistic returns.
ETPs may provide diversification for your overall portfolio, because one share or one unit may represent multiple underlying stocks, bonds, and/or other asset classes.
Association Financial Services, LLC, has the tools to help you choose the right fund or basket of funds to meet your unique goals. We can design an ETP portfolio that’s suitable for your specific situation.
In general, underlying fees and expenses for Exchange Traded Products are considerably lower compared to that of mutual funds. Non-traditional and actively managed ETPs will generally have higher fees than traditional ones.
Traditional Exchange Traded Products are generally not actively managed compared to that of mutual funds and, as a result, typically generate fewer capital gains due to the low turnover of the securities within their portfolio.
Association Financial, LLC, and Association Financial Services, LLC, can provide you with a wide range of advisory services (whether fixed or variable investments), including:
- Annuity selection (fixed or fixed-indexed)
- Assistance in deciding when to buy and sell your investments
- Review of insurance and investment portfolios, as well as transferring assets or qualified plan rollovers
- Individual bond, commodity, equities (stocks), ESG stocks, Exchange Traded Product (ETP), investment trust, and REIT selection
- Strategic asset allocation strategies including re-balancing
- Attorney and CPA services
- and much more.
Contact us here for more information.
Investing in securities involves risk of loss that clients should be prepared to bear.
