One feature ensures superior transparency to all ETFs: the publication of their indicative net asset value (iNAV), which takes place continuously during exchange trading hours. It enables investors to evaluate and compare the bid/ask spreads in terms of their relative pricing attractiveness.
ETFs offer an extremely interesting price/performance relationship. The management fees are far less than those charged for actively managed funds and, due to the emergence of new providers and the resulting competitive pressure, they are declining even further. And because they have no term limitation, ETFs also involve no rollover costs as opposed to futures contracts, for example.
Liquidity and Flexibility
ETFs are exchange-listed and -traded on a continuous basis, thus investors benefit from tremendous flexibility and can easily buy or sell fund units at any time via their bank or broker. They can respond to market developments in real-time, and various order types are available to help them manage their portfolios even more efficiently.
A steady flow of liquidity is ensured because, for each product, SIX Swiss Exchange obligates at least one market maker to post ongoing buy and sell quotes – a service that distinguishes ETFs from many other financial products – and also verifies that the minimum size and maximum spread requirements are complied with. Here too, the increasing competitive pressure among market makers is leading to narrower spreads, i.e. lower costs for investors. Liquidity is also enhanced by trading activity in the secondary market, which the exchange monitors as well in order to ensure that it is fair, orderly and transparent.