Learning About Exchange Traded Funds (ETFs)


For every given investment goal, investors can choose from a staggering variety of exchange traded funds (ETFs). There are several to choose from, so it is helpful to learn about the different types so you can get the one that best suits your needs. The following is a brief rundown of some of the most common investment types, along with some sample ticker symbols you can use in Yahoo Finance or MSN Money Central. Investing is not a game, so do your research and talk to an expert before making any moves.

Variety is a good thing, and ETFs offer that. There is an exchange-traded fund (ETF) out there for every possible trading strategy and investment goal. Exchange-Traded Funds (ETFs) can be found that follow:

Broad indices include the Dow 30, the S&P 500, and the NASDAQ 100. You can recognise them by their tickers: DIA, SPY, and QQQQ. The Morgan Stanley European and Asian Mature Company Index is another significant index, along with the Japan Nikkei (EWJ) and the European Large-Cap 350 (IEV) (EFA). Because it stands in for the developed industrialised world outside of the United States, I have a soft spot for EFA.
key market segments: these include exchange-traded funds (ETFs) for each of the nine S&P 500 sectors (often referred to as “Sector Spiders”). Some of the sectors represented by these ETFs begin with the letter axe, including the financial sector, manufacturing, consumer staples, utilities, and technology. These trade at high volumes, have a high degree of liquidity, and can be bought and sold both directly and through options.
world markets: this includes categories like Asia except Japan (EPP), Europe and Asia combined (EFA), Latin America and emerging markets (EEM), and emerging markets (EEM). These generally reflect the most valuable publicly traded corporations in each country’s stock market. Countries like Canada (postal code 9EWC), Mexico (postal code EWW), and one of my personal favourites, Brazil (postal code BR) (EWZ). The Brazil exchange-traded fund (ETF) is highly liquid and stands in for a country that is rapidly becoming Latin America’s (and the Western Hemisphere’s) economic superpower.
Market segments include industries including semiconductors (SMH), utilities (XLU, UTH), regional banks (KRE), US real estate (RWR), biotechnology (BBH), and medical devices (IHI).
Individuated commodities and commodity baskets: this area has been red hot over the past year, but its momentum may be waning. When long-term patterns come to an end, commodity prices tend to be cyclical and extremely volatile. Commodities like gold (GLD, IAU), wheat (GLT), and a host of others can be purchased through exchange-traded funds (ETFs), or grouped together in indices like the Deutsche Bank commodities mix (DB (DBA).
The US dollar, along with the other six main currencies traded on the Forex market, can now be bought and sold in pairs via exchange-traded funds (ETFs) (USD). To capitalise on the disparity between currency pairs, there are also sophisticated exchange-traded funds (ETFs). This type of trading requires expertise and is not suitable for beginners.
In accordance with the Morningstar style box architecture, various exchange-traded funds (ETFs) exist, such as large-cap value and small-cap growth.
There are also exchange-traded funds (ETFs) that mirror specialised investment philosophies and theories, thanks to companies developing their own proprietary fundamental screens. Since these are all quite complex methods, I will not reveal their logos for your own safety. It is sufficient to realise that different types of bonds and dividend-paying ETFs can be used to construct different investment and trading philosophies. For instance, the Vanguard Total Market Index Viper is a basic case of long-term treasuries (TLT) and aggregate income, which is a mix of treasury and corporate bonds (AGG), the global market (VTI)
Because of the wide variety of ETFs available, you can rest assured that your specific investment requirements will be met.
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2022-10-13 00:30:00