Some of the key attractions of investing in ETFs are low cost, transparency, flexibility and choice. An ETF tracking a developed equity market such as the FTSE 100 can cost as little as 0.07%, compared to an average 1.01% for UK large-cap mutual funds (Morningstar, August 20) Unlike a unit trust, which trades at one set price point during the day, ETFs can be traded whenever the stock exchange is open. This makes them a flexible way of investing.Investing in ETFs also makes it easier to diversify your portfolio. For example, buying an ETF that tracks the S&P500 is comparable to buying a small part, in the appropriate proportion, of each of the index’s 500 companies – all at a much lower cost than would be feasible for an individual given the commissions charged for each trade and the capital required.ETFs unlock diversification for investors because they typically follow broad based and well diversified indices, spreading the risk of your investments across many securities.