allow investors to invest in a basket of assets without having to purchase individual stocks and shares. Professional trading houses compose these ‘baskets’ into funds and then offer shares of the funds to individual investors.
ETFs can be composed across various industries and comprise various assets. Therefore, they offer a high degree of diversification that can help to reduce risks that may arise from over-exposure to a certain market. REITs have become popular among investors as they are able to provide steady income. For instance, a popular shopping mall may appreciate value as it continues to attract and/or retain high-profit tenants.
To compose your investment portfolio, robos typically draw from a range of ETFs that range across various asset classes. How do a bunch of bots formulate their investment strategy? Based on your financial goals. This tool is therefore best suited for beginner or hands-free investors who prefer to not have to track their investments too much. You can also automate your funds transfer from your bank account by setting up a recurring payment, and the robos will keep going with regular fund injections.
Stocks are also typically traded in lots of 100, so investing in a high-performing stock such as Apple Inc can incur a high initial investment sum.