ETFs hold a basket of securities to track performance of a specific index. Unit trust funds also hold a portfolio of assets. Nevertheless, both funds have marked differences.
The main differences between ETFs and unit trust funds are:
|Buy and Sell Transactions|
|Cost to invest|
|Minimum Investment Amount||No|
|Continuous trading and pricing throughout the trading day?||Yes||No|
|Can be purchased online?||Yes||Yes|
|Redemption charges for withdrawals||No||Yes|
|Possible to view the underlying securities?||Yes||No|
|Possible to receive dividends?||Yes||Yes|
* Only for specific unit trust i.e. through a bank
** Only for specific unit trust funds, typically bond funds.
*** Most funds only reveal their top ten holdings.
Source: Bursa Malaysia
|Purchase of ETF / Stocks / Unit Trust||T+3||T+3*||Upfront|
* T+3 means the 3rd market / business day after trade date.