Having chosen the asset class, region or market segment we want exposure to, we will then select the most liquid ETFs in each category.
This means ETFs with high trading volumes, low bid/offer spreads and minimal tracking error. We also pick ETFs with low total expense ratios and only invest in ‘physical’ ETFs, which either replicate the index they are tracking in full or sample a proportion of it. We avoid ‘synthetic’ swap-based ETFs entirely, which are more complex instruments that use derivatives - and not the actual assets - to track an index, and can expose investors to additional risks.
And to ensure we remain at the forefront of investment trends, our whole selection process is under continual review.