What to consider when trading ETFs?
1. ETFs can be purchased and sold anytime during the exchange trading hours
During the opening and closing hours, the markets tend to be more volatile. As such, trading after and before the 15 minutes of the day is the best time when the market has less activity, resulting in wider spreads between bids and offers. Furthermore, it is important to understand the underlying exposure of an ETF. For example, holding ETFs with underlying exposures on the US market, consider trading when the markets are open, due to the value of the ETF being easier to calculate and the bid/offer spread tighter.
2. The order type by limit and market of the order
Limit order allows the investor to specify the price they are willing to buy or sell at, ensuring they get the desired price or better. On the other hand, the market order executes as soon as possible at the going price at the time. However, this type of order is usually executed more quickly but can result in an unexpected outcome if the market price changes rapidly. When buying Exchange Traded Funds (ETFs), Limit Orders are generally recommended to get the best possible price.
3. ETF liquidity has always been very important when selecting any investment
The more liquid an investment is, the easier and more cost-effective it could be traded. The less liquid an investment has, it may take longer to buy or sell and higher-priced. When evaluating ETFs liquidity, it needs to be considered that ETFs are open-ended investment vehicles. This means the number of shares in the ETFs will increase or reduce in favor of the investor.
How to buy Hejaz Islamic ETFs?
Open an account with a broker that offers your favored ETFs
It is important to compare their fees and features to find the suitable one you need. You will then be required to deposit cash into your trading account or link your bank account. Later, you will need to log in and go toward the trading section. In that section, enter the ASX code or ‘ticker’ of the ETFs you are interested in, either ‘ISLM’ or ‘HJZP’ for Islamic ETFs.
Place an order with your broker and specify the number of shares
Once you have decided which ETFs you buy, you will need to place an order with your broker and specify the number of shares you want to purchase along with the price you are willing to buy. You can also request to buy at a specific price known as a limit order, or the best available price at that time, known as a market order. When the order has been placed, wait for the trade to settle and your broker will notify you when the order has been completed. After the trade settled, keep watch on your investments by tracking the ETFs performance and ensuring that it meets your investment goals. Lastly, you will need to sell your ETFs when you are ready to exit your investment. You can do this by placing an order with your broker.
Conclusion
Islamic ETFs are a new and growing investment product that offers many benefits to investors, they have become a popular investment product due to their compliance with Sharia law. The launch of Hejaz Equities Fund (ASX: ISLM) and Hejaz Property Fund (ASX: HJZP). made them the first Sharia-compliant ETFs on the ASX. The Hejaz ISLM and HJZP are both excellent investment options for those motivated by ethical concerns, seeking increased diversification, or tapping into the growing global demand for Halal products and services. Investing in an Islamic ETF could be a smart choice, are you interested in investing in an Islamic ETF?
