The exchange transfer fund (ETF) is an innovative favorite by investing professionals. With its characteristic where it can be sold after the end of a trading day for its net asset value like that of a mutual fund, and its tradability ability like that of a closed ended fund, plus its stock-like features wherein you can control your investment portfolio, it is no doubt a choice of a wise investor. A common dilemma however for investors is which investment scheme they should employ in stocking their funds: growth ETF or value ETF.

Growth Investment is an investment strategy where buyers invest in companies that show fast growth. The turnover of the earnings is faster thus you see quicker results. Due to its above-average growth, the share price in this company is expensive with its price-to-earning ratios.

Value Investment, on the other hand, is buying of company shares that seem to be under priced by sellers. This is either because the company has low price-to-book ratios or has low price-to-earning ratios. This investing practice encourages the buyer to invest on an outstanding company at a sensible price.

In the business race, growth ETF is referred to as the rabbit. The value ETF is symbolized as the turtle. You can see the results faster in growth investment compared to value investment. Investors who would like to have a profit immediately go for growth oriented ETF.

Growth investment can quickly pass the higher price to consumers due to financial crisis to the company’s consumers. Thus, the company’s expenses will be minimal. Let us take a look on various market trends. SPDR Dow Jones Wilshire Large Cap Value, for example, went down 13 percent in 2008. SPDR Dow Jones Wilshire Large Cap Growth went down only 7 percent. iShares Morningstar Growth went down only 8.7 percent versus iShares Morningstar Value at 16.6 percent.

A growth investment may seem beneficial at the time of financial crisis. After the market recovery though, value investment will be the one that will gain big profits as compared to growth oriented ETF.

You will also have to consider that a growth fund is expensive to maintain as compared to a value fund. You may have garnered higher profit index in growth structured companies but still will pay high annual net asset value. Even though the profits may seem high, you must check if the fees you pay to maintain the account are minimal.

Wise investors will not stick to one investment strategy though. An investment portfolio with various ETFs is good to look at. Every time you check you profile, you must see to it that every investment is balanced. Rebalancing one’s portfolio helps you make sure that you are in line with your financial aims.

In the end, a wise investor should consider splitting his stocks between growth etf and value etf.  This is called investment diversification and is a widely practiced investment style. So that when you fail in one style, you can always rely on the other. Relying on just one ETF style can put your finances at risk.