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In the Current Market Situation Bond ETF Is the Way To Go

etf trading — Thu, 29 Oct 2009 11:42:42 +0000

With the current financial downturn traders had to bear good amount of losses, but this is not true for the investors who didn’t let the greed take over their sentiments. Some traders who like to play safe invest in treasury yield bonds. I have lots of friends who had their 401k portfolio heavily invested on the aggressive side naturally they want to make fast money, on the other side I had couple of friends who had invested their 401k portfolio in treasury bonds; so in the current market situation my friends who wanted to make fast money were crying with the losses they had made and my friends who had their money in bonds were not at all worried.

If you do believe in low but steady returns you are definitely going to invest your money in bonds, and for the risky investors out there in the current market situation it makes more sense to rather invest in bonds and play safe. Bond Exchange Traded Funds entirely invest in bonds. Bond ETF possess bonds and it works with different strategies like it may invest in U.S. Treasury bonds, High Yield bonds, from short to long term bonds. Like any other ETFs Bond ETF can also be traded like shares on the exchange during the trading session. Further, like International ETFs there are also bonds available which are being established in foreign countries, traders can take advantage of the rate differences by investing in International Bond ETFs.

Below are some of the popular Bond ETFs available in the market today:

1.) iShares Lehman Aggregate Bond (AGG): most financial securities that invest in bonds considers this ETF as a Benchmark. Based on their investment, these funds are deeply invested in short-term US treasury and government securities.

2.) iShares Lehman Intermediate Government/Credit Bond Fund (GVI): These funds are more inclined towards medium range government securities and credit bonds.

3.) SPDR Lehman High Yield Cond ETF (JNK): These funds are more inclined towards long-term but high interest treasury bonds and government securities.

According to some, Bond ETF is the best option for a complete beginner who has never dealt with trading in securities of any kind, and for the traders who understand the market forces should not invest in bonds. However in the current economic situation I would encourage traders to invest in Bond ETF.

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Carefully Scan the ETF List And Their Ratings

etf trading — Tue, 27 Oct 2009 13:28:00 +0000

In the past traders had limited options of investing where in stocks became the most popular out of the all available options. Investors started heavily investing in stocks where they made and lost money, some became rich and some became poor. In the recent years Exchange Traded Funds were introduced which gave traders such flexibility where they only need to decide about the direction they want to invest in and let the fund managers manage their funds and earn profits for them. These Funds not only gave them liberty of staying away from the headache of keeping a track on their investments but they can also trade these funds like stocks on the exchange.

There are several types of ETFs available in the market for taking advantage of available profit opportunities and to cater to investor’s requirements. Today if trader believes that a particular sector is going to outperform all the other sectors he does not need to take a risk of going all in on a particular company he can instead invest in Sector ETF where investors money is invested in multiple companies in that sector. Likewise there are Commodity ETFs (Which includes precious metals like Gold), Index ETFs (To take advantage of the index volatility), International ETFs (To bank upon emerging markets and their currencies) etc.

If your sentiments are encouraging you to invest in a particular direction and if you choose to invest in ETFs it’s important to find out the ETF List together with their ratings. Today there are many websites where you can find the ETF List namely: Yahoo Finance, Google Finance, MSN’s Money Central, Money Morning, The Street and many more. Different websites have different ways of displaying this data; some websites only show all the available ETFs while at some websites one can view the ETFs based on which bank or financial institution offers them, based on their type, based on their performance and other permutations and combinations.

One also needs to carefully look at the ratings given to these funds. All the websites have their own way of rating these funds like “The Street” has the following categories for rating the ETFs A is Excellent, B is Good, C is Fair, D is Weak, E is Very Weak, + (Plus Sign) rating belongs to the top third of its letter grade, - (Minus Sign) rating belongs to the bottom third of its letter grade.

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Tired of Seeing Your Portfolio in Red? Investing in International ETF Can Be A Smart Choice

etf trading — Mon, 26 Oct 2009 00:37:14 +0000

In the past there were barely any ways for traders to invest in International markets, so if the local markets are turning out to be risky investments it was tough for traders to find a way to hedge their risks or had to just wait for the good times to come. Today there are more than 170 U.S. ETFs available in the market which concentrates on international exposures which includes investing in global businesses in a particular country, dividend and fixed-income instruments or emerging markets’ currency.

Initially when the International ETF was introduced for the traders based in United States they offered Eastern Europe, Latin America and Southeast Asia in the same fund termed as emerging-markets. Now days you can trade on the metal prices on exchanges in India and China, one can play on political ambiguity in Turkey, business located in small but strong economy like Malaysia thanks to ETFs. The instruments offered today gives strength to the investors to invest in any economy in any part of the world, and all the different verities of products.

International ETFs are increasingly becoming popular with the current financial crisis. As performance of U.S. markets is facing the consequences of recession and since it’s not true for other Asian and Emerging markets traders are investing in ETFs that manage their funds in those markets. In the past if the developed countries were in recession it would hurt the emerging market’s performance as well, however today local businesses in emerging markets are so strong that recession in developed economies have little effect. By investing in International ETF traders can hedge their current positions in the local exchanges or they can just square off their local positions and only invest in emerging markets where today there are more opportunities to earn profits.

Depending on the changing market forces and changing conditions of different economies of the world banks and financial institutions offer funds that would help the investors make profits. Some of the popular International ETFs are as follows: iShares MSCI Emerging Markets Index (EEM) - these funds have given great returns if you look at the change in its Net Asset Value. Their Top 5 Holdings include Samsung Electronics Co., Ltd. (GDR), Taiwan Semiconductor Manufacturing ADR, Itau Unibanco Holding S.A. ADR, Petroleo Brasileiro S.A., Petroleo Brasileiro S.A. ADR. Likewise there is iShares Trust FTSE-Xinhua China 25 Index Fund, iShares MSCI Brazil Index Fund, iShares MSCI South Africa Index Fund and many more.

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Silver ETF Perfect Way to Hedge Your Risk in Today’s Financial Crisis

etf trading — Sat, 24 Oct 2009 15:00:50 +0000

Silver is termed as a precious metal and over the time apart from being used as jewelry, people have started using and accepting silver in different verity of items. Silver is also being used these days as raw material for making refrigerators, keyboards, phones and silverware. So the importance of precious metal commodity like silver has increased as a hedge against the downward market, and looking at today’s financial crisis and market volatility it becomes even more important for traders to use precious metal ETFs. Further, not only for the hedgers but also for investors looking for returns there has been a steady surge in the price of silver over the years. Reason could be any for a trader to invest but Silver ETF is becoming a effective way of investing in precious metal and not dealing with the hassle of physically holding silver.

Generally there are two types of Exchange Traded Funds that deal in silver where a trader can invest. First type of ETF is where banks or financial institutions actually hold silver and Second type of ETF is where fund managers invest in the futures and options that track the price of silver. Both the types of ETF will move in the same direction as the current cash price of silver. Silver ETFs become a perfect investment for banks or institutional investors looking for short term gain or who wants to use this commodity fund to hedge their risks from other investments for a while. However, there are a limited number of investors who are looking for long term gains out of this precious metal based on its robust historical data and also because they want to play safe.

Some of the most popular Silver ETFs are as follows:

1.) iShares Silver Trust (SLV): This fund is quite old in comparison to others that offer Exchange Traded Funds in Silver, it is also one of the largest of all. SLV is a fund that holds physical silver and keeps the investors free of the headaches associated with holding precious metals. Today iShare Silver Trust holds silver worth $4.54 billion.

PowerShares DB Silver Fund (DBS): Unlike its counterparts this fund doesn’t hold physical silver but it invests in derivatives that track spot price of silver. Futures and options contracts these fund deal in are based on an index managed and developed by Deutsche Bank.

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