5 Reasons Why Exchange Traded Funds (ETFs) are Great for Investment

Exchange Traded Funds (ETFs) are investment funds traded on stock exchanges. ETFs earn recognition for providing exposure to a variety of asset classes, including equities, bonds, commodities, and real estate, allowing investors to diversify their portfolios without the need to purchase individual stocks or securities.

In recent years, Australian investors have shown increasing interest in ETFs due to the benefits of these investment vehicles. Experts expect the popularity of ETFs in Australia to continue growing as the range of available ETFs expands to meet the evolving needs of the market.

Invest Halal ETFs with Hejaz

At Hejaz, we understand how important it is to align your investments with your values. That's why we adhere to strict Shariah screening for all our investment options, including funds and ETFs.

This ensures that your investments are free from interest (Riba) and activities not in line with Islamic principles. By diversifying across various assets, sectors, and regions, we aim to maximise your potential returns in accordance with Shariah principles.

The Advantages of Investing in Exchange Traded Funds

Among the various investment options available, Exchange Traded Funds can be a choice for you, whether you're just getting started with investing or aiming to broaden your investment portfolio. Wondering why? Let's explore the reasons below!

• Diversification

  Nowadays, investors have increasingly recognised the importance of diversifying their portfolios. ETFs allow investors to spread their money across a variety of assets, which can help reduce investment risk compared to investing in individual stocks or securities.

• Lower Costs and Fees

  Compared to many mutual funds, ETFs generally have lower expense ratios and management fees, making them a cost-effective option for investors. It's because ETFs are designed to track specific indices or sectors, which often leads to reduced administrative costs and streamlined management processes.

• Transparent

  With most funds disclosing their holdings on a daily basis, Exchange Traded Funds provide transparent information about their assets. This allows investors to know precisely what they are investing in and track the fund's performance over time. Consequently, it fosters greater confidence and trust in the investment process among investors.

• Flexible

  ETFs are traded on stock exchanges, making them easily accessible to investors. It offers a wide range of investment options, whether you are looking for long-term growth or a stable income stream. This flexibility allows investors to customise their portfolios according to their financial aspirations and risk tolerance levels.

• Tax-Efficient

  Because of their unique structure, ETFs are often more tax-efficient, allowing them to minimise capital gains distributions. As a result, long-term investors can benefit from reduced tax liabilities and gain more from the potential compounding of returns over time.

How to Start Investing in Exchange Traded Funds?

To begin investing in Exchange Traded Funds, start by researching different types of ETFs while simultaneously understanding your investment goals. Then, choose the ETFs that not only align with your risk tolerance but also your beliefs.

Once you have invested in the chosen ETFs, regularly monitor your investments and diversify your portfolio across various asset classes. Always remember that investing in ETFs carries risks. So, it's crucial to conduct thorough research and potentially seek advice from a financial advisor to make informed decisions.

Explore a wide range of Shariah-compliant investment options, including the Hejaz Equities Fund (ASX: ISLM), the Hejaz Property Fund (ASX: HJZP), Hejaz Sukuk Active (ASX: SKUK), Hejaz High Income (ASX: HJHI), and Hejaz High Innovation (ASX: HHIF).

Disclaimer:
The information presented above is prepared by Hejaz Asset Management Pty Ltd (ABN 69 613 618 821). It provides general information only, which means it does not take into account your individual objectives, financial situation, needs or circumstances. Before making any financial decision, you should assess whether the information is appropriate for you. You should also seek appropriate financial advice tailored to your needs before making any financial decisions. This information is not an offer or recommendation to make any investment or adopt any investment strategy. Past performance is not a reliable indicator of future performance.