Exchange-traded products (ETPs) are similar to mutual funds in that they’re made up of a basket of securities.  Those securities can include stocks, bonds, commodities, or indices. The main difference between exchange-traded products and mutual funds is that ETPs are traded like individual stocks on an exchange.

The value of the ETP may be different than the Net Asset Value of the underlying holdings, and so its important to know the value of the holding before placing a ETP trade. Traditional exchange-traded products are generally not actively managed and typically generate fewer capital gains.  For clients who prefer a passive investment approach and want to minimize active management expenses, using a portfolio of ETP can be an attractive alternative.  We can help determine if ETP investing could be right for you.

Peak Financial Trades

Benefits of Investing in Exchange Traded Products

Exchange-traded products encompass a number of investment structures that track an underlying benchmark, index, or portfolio of securities. A comprehensive financial plan helps you to Construct a lifelong cash flow forecasts, showing all the money you will receive and all the money you will spend in your lifetime. The cashflows use prudent assumptions to protect against inflation and uses realistic returns.

They may provide diversification to your overall portfolio, because one share or one unit may represent multiple underlying stocks, bonds, and/or other asset classes.

In general, underlying fees and expenses are low. Non-traditional and actively managed exchange-traded products will generally have higher fees than traditional ones.

Traditional exchange-traded products are generally not actively managed and, as a result, typically generate fewer capital gains due to the low turnover of the securities within their portfolio.