In 1993, State Street Global Advisor set in motion Exchange Trade Fund in the form of SPDR. Subsequently, ETFs gained considerable popularity among investors and attracted a rush of liquidity which is still pouring in to such investments. Being quite similar to mutual funds that already enjoyed popularity at that time, ETFs too became rather one of the most sought after investment choice. Today, not only amateurs, frequent traders and investors also prefer to invest their money in ETFs. All the same, there are many benefits of investing in exchange trade funds for the investors to keep their spirits high for this investment option- Can be Traded like a Stock Exchange trade funds embrace all the best features of stocks. Stock markets are quite unpredictable and the best time to sell might not come back so often. During the trading hours in stock markets, quite often an ETF peaks out and bottoms out, providing traders ample opportunities to trade for profit and keep the investment intact by buying back at the close. ETFs can be traded like equities at market rate during the trading hours; unlike mutual funds that are sold only at day’s closing.

Lower Ratio of Expense Involved

For an investor, an investment option that spends the least and fetches the most is the best. Considering, ETFs are available at low expenditure costs, i.e. around 10 basis point converses to mutual funds that can be bought on expense ratio of 20 basis points, it makes them a viable option for value investors and frequent traders.

Saves on the Brokerage Cost

Because ETFs can be traded through brokerage firms, one can look out for a broker to charges the lowest brokerage fees and expenses on trading of Exchange Traded Funds.

Wide Range of ETFs

ETFs are available in a wide variety which lets an investor diversify their portfolio in various sectors of economy. One can opt for ETFs related to equities, International ETFs, regional ETFs for various markets in Europe, Pacific Rim, Country Specific ETFs to deals in Japan, Australia, UK, and specialized ETFs through which specific industries such as technology, biotech, and energy can be covered.

Tax Benefits

As a cherry on the cake, ETFs are also tax savers as an investor can trade ETFs in large volumes and then redeem taxes at the end. ETFs can also be exchanged with equities to reduce the amount of tax levied on their returns.