ETFs (Exchange traded funds) are enjoying increasing success with individuals. These continuously listed index funds were, until now, actively marketed by digital platforms (online banks, Internet savings specialists, etc.). Plum is launching forty-seven ETFs in France on Tuesday June 4.
However, these funds are starting to be seriously distributed by traditional players. The LCL bank therefore offers a selection of twelve ETFs in its life insurance contracts on the same day. Subscription can be done in agency or online.
Generally speaking – and before launching into an ETF investment – several points must be checked.
Before subscription, the manager of the ETF or the intermediary who distributes it must give you a key information document (KID). Even While these index funds appear to be relatively simple financial products, there are a few aspects of these investments that deserve your attention.
The benchmark
This is what needs to be determined first. In which market do you want to invest? Stocks or bonds? ETFs provide exposure to evolution numerous assets: the main stock exchanges on the planet, economic sectors, raw materials, etc. “Due due diligence on any passive investment should always start with a thorough review of the index the fund tracks, because it represents the investment strategy in which the investor will engage. Investors should ensure that the index accurately reflects the investment proposition they are seeking”insists Jose Garcia-Zarate, associate director of research at the analysis company Morningstar. “Depending on your needs, you have to look for the right index: the economic zone, the sector, the theme, etc. »advises Fabien Keryell, director of Saxo Banque.
The management company
Once reserved for a few specialized entities, ETFs have attracted traditional management companies. “We are seeing a craze for passive management, which is why active managers are entering this market”, observes Julien Valarcher, director of ETF sales in France for Invesco. The number of these new players is now exponential. So, how to make your choice?
For the major stock market indices (CAC 40, Euro Stoxx 50, Dow Jones, Nasdaq, etc.), it is better to prefer the big names in management. For more exotic indices, or holding specific assets such as commodities, specialized managers can be a good choice.
You have 33.89% of this article left to read. The rest is reserved for subscribers.