October 12
Have You Made the Decision of Investing in ETFs? Let’s Look At the Types of Available ETFs
There are whole bunch of ETFs available in the market to choose from. Fellow traders can look at their current portfolio and narrow down their search for the funds which is either giving them the best returns or which works best for hedging the risk they have from their current exposures. Easy entry and exit as well as the low expenses involved give ETF trading an edge over investing in Mutual Funds.
Below are some of the different varieties of ETFs available today:
1.) Actively Managed ETFs: These types of funds are recently introduced in the United States. The very first Actively Managed ETF came into existence in early 2008 however it was liquidated by the end of 2008. All the information about actively managed ETFs are available in the markets, also on funds websites one can find daily updated list of securities in their portfolios.
2.) Index ETFs: Some of the initial ETFs that came into being were Index ETFs, today most ETFs act as index funds which holds the stocks and try to replicate the act of a stock market index.
For example: iShares S&P 500 index ETF (IVV), iShares Dow Jones US Insur. Index ETF (IAK).
3.) Commodity ETFs: Commodity ETFs are the funds that hold the actual asset and track the price of the underlying commodity and accordingly this ETF is traded on the exchange based on its Net Asset Value.
For example: Market Vectors Gold Mining ETF (GDX), SPDR Gold ETF (GLD).
4.) Bond ETFs: They invest in Government treasury bonds, these funds are the best during the time of recession. People who stayed invested in stocks during the financial crisis not only lost their profits but also a part of their invested principle.
For example: iShares iBoxx $ High Yield Corporate Bd (HYG).
5.) Currency ETFs: There are sub categories in this type of ETFs there are some ETFs which invest in multiple currencies and there are some that invest in a particular currency.
For example: Sterling Money Market ETF (XGBP), US Dollar Money Market ETF (XUSD).
6.) Hedge Fund ETFs: Exchange Traded Funds over here tracks multiple hedge funds and follow their activities and/or strategies.
For example: Index IQ Hedge Mst ETF (QAI).
Now since you have made the decision of investing in ETF find the one that best suits your requirement and start rolling.
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