Creating an investment portfolio using ETFs has certain benefits when it comes to the allocation of assets.
Firstly, as an ETF is a combination of securities, you already gain the diversification advantage of having to invest in all its subcomponent stocks and have exposure to the multiple types of industries. And this would lead to the second benefit of cost.
You have the advantage of buying at only a fraction of the transaction costs as well as ‘economies of scale’ advantages compared to if you were to invest into individual ETFs on your own.
Another benefit is also its liquidity as ETFs can be easily bought and sold throughout a trading day.
There is a high level of transparency as an ETF price is readily available on the stock exchange as compared to products such as unit trusts which prices are always indicative only.