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To buy or not to buy

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Founder and director of financial and investment education website JustOneLap.com, Simon Brown.
Founder and director of financial and investment education website JustOneLap.com, Simon Brown.

We’ve seen a bunch of new exchange-traded products (ETPs) listed over the past year and we now have 85 exchange-traded funds (ETFs) and about as many exchange-traded notes (ETNs) on the JSE.

In this issue, what I want to touch on is the process of how to decide whether that new shiny ETP is worth adding to a portfolio.

The first question is whether it is a carbon copy of an existing ETP which you own? If it is, then it’s worth checking some details such as the total expense ratio (TER) and whether the ETP is maybe a total return product. A cheaper TER is always attractive and buying the newer and cheaper one is a simple decision – do it.

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