“We try to take advantage of the market movements and make sure clients get a better deal,” Charles Zhang, an adviser with Zhang Financial, said in the article.
However, there are some things to watch out for. For instance, since ETFs trade like stocks, investors will have to watch for the bid-ask spreads. Consequently, investors should use limit orders to better execute orders. [Manage Risk, Take Control of Trades with ETFs]
“If a certain ETF has a huge spread, when you buy and sell, you could be losing a lot,” Zhang added.
Given the transparent nature of ETFs, Daniel Schwartz, an adviser at UBS Private Wealth Management, also advises that investors to look for ETFs with minimal tracking error relative to their benchmark’s net asset value, so that one will know exactly what he or she is getting into.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.