Exchange Traded Funds (ETFs) are open-ended investment funds which provide trading flexibility like stocks. They are designed to replicate the performance of an underlying index and allow access to a broad range of markets and asset classes.

You can adopt a wide range of investment strategies using ETFs.

Strategic Allocation – Buy and Hold 
ETFs are ideal portfolio construction vehicles for long term strategic allocation and can be kept indefinitely as long as the ETF is listed.

Tactical trading
Transparency of ETFs information and intraday liquidity allow investors to make well informed investment decisions to adapt to the ever-changing market.

Core-satellite investment
For core-satellite investment, the core investment usually includes passively managed investment which tracks major market indices while satellite investment consist investments which aim to outperform the stock market. This strategy allows investors to minimize costs (with passively managed tools) and provide them with the opportunity of earning higher returns (satellite investment). As such, ETFs are great tools which can be used to form the core market portfolio.

Cash equitisation
To minimize the cost of holding cash, ETFs can be used to convert cash into equities temporarily.

Hedging
Investors can adopt various hedging strategies using ETFs. For instance, an investor may long a specific market segment while shorting an ETF at the same time.

Efficient 
ETFs are cost efficient as investors can gain exposure to a diversified set of securities in a single transaction.

In addition, the annual management fee charged on ETFs (less than 1%) are usually lower than traditional mutual funds and unit trusts (about 1% to 2%) as ETFs are passively managed funds.

Transparency
Real time information such as ETF prices, fund and index information are readily available online. ETFs prices are updated real-time during trading hours.
  
Flexible 
Investors can buy and sell ETFs anytime during trading hours and may employ the traditional trading techniques including stop order, limit order and short sales.

Like stocks, ETF can be bought and sold on exchanges during trading hours. Investors can also use various trading techniques like stop order, limit order and short selling on ETFs.
  
Access to multiple markets
ETFs provide an option for investors to enter the markets which are not easily accessible.
  
Liquidity provided by market makers
For most ETFs, market makers are appointed by the issuers to provide competitive bid and ask quotes.

ETFs combine the best of shares and units trust

* subject to fund manager's / company's discretion
^ usual brokerage applies