Welcome to the world of investment. If you are new to ETF (Exchange Traded Funds), it is probably time to analyze this as part of your investment portfolio. So, what is an ETF? An ETF is an Index Fund that is quoted on a stock exchange and traded intraday (you can buy and sell it at any time of the day just like a stock). Therefore, ETF can describe as a Mutual Fund trading like a stock. While there are some very important differences between them, it is easy to understand ETFs if you consider them as mutual funds.
Why do I propose that you should take a look at ETF as part of your investment portfolio in today context? Since ETF is relatively new as compared to mutual funds, also that means there are now few investors with the basic knowledge and skill investing in it, so providing a huge opportunity for young investors in this investment arena.
Who Issues ETFs?
Do you want to find a complete list of ETFs currently on the market? A pretty complete list is actually on Yahoo! finance. If you go there, you will find a section on ETF in the “Invest” tab. Deepen using the menu on the left until “View ETF” appears. It is not necessarily 100% current, but again, it is the best resource on the Internet at this time.
To get more detailed information about ETFs, you will want to visit the websites of the issuers of these ETFs. There you will find much more information that will help you identify the exchange-traded funds that you feel comfortable buying.
Some of the main issuers include:
- Barclays – iShares
- State Street Global Investors – SPDR (spiders) and streetTRACKS
- Merril Lynch – HOLDRSs
- Rydex Financial – Rydex ETFs
- Vanguard Group – Vanguard ETFs
- ProFunds – ProShares inverse and leveraged ETFs
- Bank of New York – BLDRS (based on ADRs).
Some of the Common ETFs:
Standard & Poors Depository Receipts, Series 1 (SPDR): A word about ticker symbols- each stock ETF or index mutual fund has an assigned ticker symbol. For example, the symbol for “Citigroup” is C and the symbol for “S & P Depository Receipts (SPDR)” is SPY. Every time you want to exchange security, you must type the ticker symbol.
The SPDR (also known as SPIDER) is an ETF that tracks the performance of the S & P 500 Index. They are listed on the AMX (American Stock Exchange) and you can buy and sell them as the shares of any other company.
The DIAMONDS Trust Series 1 aims to track the performance of the Dow Jones Industrial Index. They are listed on the AMX and can be bought or sold easily as the shares of any other company. Learn more.
ETF is an excellent investment tool that should not be lost at this time when the market is bruised after the credit crisis and is in a tendency to recover in the coming years. The beauty of ETFs is that they allow you to allocate money in the same way an institution does, that is, sector by sector. This used to be the Big Boy game, but with ETF, young investors like us can afford to join the game now. As I always said, this crisis is once in a lifetime so you can get a big profit on your investment portfolio, do not miss the boat this time, remember to accumulate any weakness and keep investing in the coming years. For more information visit: http://www.netpicksetfinvestor.com/start-here/learn-about-the-etf-portfolios/