ETF trading platform in Malaysia
An Exchange Traded Fund (ETF) is a basket of investments that, like a stock, is traded on a stock exchange. ETFs are typically used to track a specific market index. Thus, they are also called index trackers. There are also traditional mutual funds that focus on a particular index and duplicate it. The difference between an ETF and a traditional mutual fund is that, unlike funds, ETFs are passively managed.
ETF funds have advantages and disadvantages. The advantages of investing in ETFs include:
- low (or zero) commissions for not having to pay an offline broker;
- the ability to diversify, since there is no need to choose and buy individual stocks (which in total is considerably more expensive), but instead have the ability to invest in a complete package of financial assets;
- choice of investment direction: you can invest in individual sectors, from an ETF that tracks an IT development index to an ETF that tracks a livestock index and so on;
- no investment volume requirements, which means that investors in a given ETF can buy one stock or many;
- ETFs provide access to a wide range of securities, including bonds, foreign market indices, commodities and currencies;
- ETFs trade like stocks: they can be bought and sold throughout the trading day.
What should be the trading platform for trading ETFs? After analyzing the brokerage market, we have selected what we believe to be the best investment trading platform for trading ETFs.
The topic of today's short review is the best ETF trading platform in Malaysia.
How do I invest in ETFs in Malaysia?
You can only invest in ETFs in Malaysia through online investment platforms. Where do you start? First, you will need to find a reliable broker to act as your intermediary on the exchange.
Choose only a licensed broker, while researching their professional reputation and experience in this area.
The next step is to register on the online trading platform, which offers a given broker to work with. To do this, you need to visit the official website of the chosen brokerage company, click on the "registration" option and enter the data in the registration form that opens. Initial registration requires only minimal data, such as a username and a valid email. After confirmation of the registration, which takes place via a standard automatic link sent to you by the system to the indicated email, your account is ready for use.
This is usually the standard registration option on most platforms.
On the platform we have chosen, it is additionally possible to register with social networks you will find the corresponding icons at the bottom of the registration form.
The main difference between a quality online platform is the availability of a demo account.
We have a demo account on our platform. You can use a demo account to practice trading on it without risking your own funds. All operations from a demo account using fictitious money are automatically charged by the system right after registration. In our case this amount is $10000. Also, if necessary, this amount can be updated as many times as needed. The use of the demo account is free and there is no time limit.
Also this platform offers simple and affordable deposit methods. It is clear that to start real trading you will have to make a real deposit into your real account. It is easy to do so, just click on the "make a deposit" option and select one of the payment options offered by the system. You can do it with a bank card or with one of the online payment systems. The transfer and crediting is instantaneous. Using the same methods as for crediting, you can easily withdraw your claws from your account. However, the system may ask for additional verification details, such as scans of your identity documents. This is to ensure that your funds are kept safe.
The platform we chose has a wide range of depositing options, instant payment processing, and low limits. The minimum deposit amount is $10, and the minimum withdrawal amount is just $2.
Once you register on the online platform, practice on a demo account and then make a real deposit, you can purchase ETFs. Which fund should I choose? Below we will take a closer look at what types of ETFs exist, what their classification is and the ETF options offered by the platform we are considering.
Types of ETF funds
There is a high degree of diversity in the world of ETFs today. Specialists distinguish a number of varieties of exchange-traded investment funds, including the following:
- Marketable replicates the structure of a specific stock index;
- Bonds invest in various types of fixed-income government, municipal and corporate bonds;
- Sectoral follows the structure of an index for a particular sector (e.g. oil refining, high-tech or pharmaceuticals);
- Commodity prices track the exchange prices of one commodity or another, from precious metals to grain;
- Style focus on a particular style of investing (e.g. tracking different market capitalisation of companies, growth or index value);
- Regional as the name implies, track the securities indices of a particular country or geographical region;
- Inverse focused on "play to the downside", profiting from the decline of a particular market or industry index;
- Actively managed unlike the others, do not follow a specific index but build an investment portfolio using proprietary algorithms;
- Exchange-traded notes (ETNs) a type of debt obligation issued by a bank, the distinctive feature of which is that its value is linked to the exchange price of an asset (for example, a certain type of security or precious metal). Accordingly, the value of the liability rises or falls with the value of the asset. Created as a highly liquid instrument of access to markets, which are themselves illiquid, and also to avoid the taxes you would have to pay if you were the actual owner of an asset;
- Alternative investments provide an opportunity to invest in non-traditional assets or strategies (e.g. investing in art, wine or volatility trading).
It is wise to choose a group of funds that are engaged in activities you understand.
For example, if your core business is IT technology, choose an appropriate ETF fund, such as the SPDR Select Sector Fund, which is a US-listed exchange-traded fund that tracks the performance of the Technology Select Sector Index. The ETF holds large- and mid-cap technology stocks. The largest investments are in the US. By choosing a fund that tracks the direction you understand, you are more likely to understand market trends.
ETF types: platform's offerings
The platform offers a selection of 23 ETFs for investment. We will look at some of them. Notably, the following ETFs are popular with traders:
- US Real Estate ETF IYR - The fund mainly invests in large US real estate companies, offering investors and traders exposure to the US real estate market. As a result, the fund's performance is influenced by factors that affect the U.S. real estate market, such as general economic conditions, wages, interest rates and the overall health of the housing market. A booming housing market will improve the fund's performance, while a deteriorating housing market will hurt it.
- S&P Oil Gas Explor Product XOP registered in the US. The aim of this fund is to replicate as closely as possible the S&P Oil Gas Exploration Production Select Industry Index, an equal-weighted index. The fund mainly invests in almost all oil and gas exploration and production companies in the US, where its performance is strongly influenced by developments in the sector. The most important factor is the price of oil and natural gas and technological developments affecting exploration and production. In addition, regulations, geopolitics and general economic activity play a key role in its performance.
- Technology SPDR XLK The fund invests in the top end of the US information and technology sector. As a result, its performance depends on factors such as innovation, investor sentiment economic conditions and other firm-specific factors such as profitability and growth.
- Gold Miners ETF GDX The fund invests in global gold mining companies, offering investors and traders exposure to the fluctuations of gold prices. The fund's performance is primarily influenced by factors affecting the gold price and secondarily by company-specific factors. The former include supply and demand for gold, general economic conditions including interest rates, inflation expectations and investor sentiment. Among other things, gold is considered a safe haven during economic turmoil and adverse geopolitical events.
In addition to the above examples, you will also find other ETF funds on the website. As previously mentioned, you can choose a fund that tracks a sector whose direction is close to your heart.
One of the major advantages of the platform we have chosen is its informative and user-friendly nature. Whatever fund you choose to invest in, you will find a brief overview of the fund, current prices, an analysis of its performance, statistical data broken down by period, the amount of leverage that the broker provides on the fund and the "Traders' Sentiment Scale", an indicator that statistically reflects the trend of the asset.
Speaking of informative, it is also worth noting that the platform offers a "news" section, which gathers the latest news from reliable sources. Thanks to the platform's flexible and user-friendly settings, you can read the news on the platform from the home page or access the news section directly from the trading room. You can also set up the feed to play directly while you make transactions and view quotes charts it will appear in the left panel. This ensures you don't miss out on any important news, without having to spend a lot of time tracking news sites.
There's also educational information on the platform - you'll have an entire section with video lessons on investing. This is very handy, especially if you're just starting out as a trader.
Trading tools on the ETF platform
The platform is equipped with handy tools for trading, such as fine-tuned order functions (stop loss and take profit), a built-in multiplier option, an informing function and indicators for technical analysis.
Stop orders allow you to secure transactions by setting transaction limits. The trader determines the high (Take Profit) or low (Stop Loss) price of the asset, at which a deal will be automatically closed. It is convenient when you cannot constantly monitor the quotes chart. Stop orders are widely used when choosing the method of day trading.
The multiplier option, which is built into the right hand panel of the platform, includes a leverage feature. There is no need to request for leverage, the system will show you the amount of leverage available to you. Remember that using leverage increases the risk of your trade! Statistically about 75% of traders who have used leverage suffer losses. So make sure you understand how it works before you use it.
Technical analysis indicators will help you track the trend in the market. The platform has all the technical analysis indicators that are known and popular among traders. Simply select the "Indicators" tab in the panel, choose the one you like and activate it. The indicator graphic is superimposed on the price chart, presenting you with a clear and concise picture for your analysis. In addition, you can use a single indicator or several indicators at the same time - there are no restrictions on usage.
Other benefits of the ETF platform
In addition to the aforementioned benefits of the ETF platform we chose, there are a number of other features we liked. Among those pluses is the presence of an interactive online chat for sharing practical information with other traders, as well as the availability of feedback in the form of a support chat in 17 languages (support is available 24 hours a day, 7 days a week). There is a "our blog" section - many people overlook this section, but it is worth looking into. Here you will find articles with interesting reviews and practical advice from market experts - valuable information that may come in handy in the future.
A wide range of funds, user-friendly trading tools and a clear interface make the platform we have chosen the best solution for trading ETFs.
When it comes to ETFs, ETFs can be a solution for traders who want to diversify their portfolios without purchasing numerous stocks or spending significant capital. With ETFs, you can choose the industry you want to invest in and find the fund that best suits your strategy. Since ETFs are traded like stocks, they can be bought and sold at any time, depending on the trader's objectives.
Open a demo account and choose an ETF fund to invest in today - try for free how it works and see the convenience of your chosen ETF platform, which we believe is the best ETF platform in Malaysia.