ETFs 101: Understanding Bid and Offer Spreads

Among the issues investors need to consider when buying and selling exchange traded funds (ETFs) are buy and sell spreads. Spreads are often seen as an unavoidable cost of trading and investing, and are not unique to ETFs per se. What’s more, the competitive nature of open exchange markets – as well as the impact of dedicated market makers – help to ensure ETF bid-offer spreads are as tight as possible. An ETF’s buy-sell spread is the difference between the price at which investors can buy the ETF on the exchange and the (lower) price at which it could be sold back to the market. This ‘spread’ can be seen when looking at the websites of online brokers and is also displayed by the ASX on the market data pages of its website. For more click the link: (VIEW LINK)


David Bassanese
Chief Economist
BetaShares

Author, columnist, investment strategist and macro-economist. Previous roles at Federal Treasury, OECD, Macquarie Bank and AFR. I develop economic insights and portfolio construction strategies for BetaShares' retail and adviser clients.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.