The rate at which the Exchange Traded Fund (ETF) industry is growing continues to be extraordinary, the global ETF market has just surpassed $17 trillion in assets under management. ETFs continue to be very popular with investors due to key features that they provide investors.

Primarily centered around accessibility and cost-effectiveness, investors have been able to build well diversified portfolios without having to carry the heavy cost of high management fees related to actively managed unit trust funds. While mainly known for being passively managed, a fast growing universe of ETFs are now also actively managed.

Both methods provide investors with the ability to choose between consistency and flexibility, though investors must note that each approach has its own strengths and weaknesses. In this article we’ll explore the basics of ETFs and highlight the key characteristics of both types of ETFs, and compare their advantages, and considerations for investors.