Frequently Asked Questions about ETFs
Q: Are ETFs guaranteed or insured?
In the area risk of abuse is very low. Besides, the Securities and Exchange Commission (SEC) reviews every application for the creation of a new ETF. Another helpful thing is The Depository Corporation, which makes sure stock certificates make it to the person who bought the stock also makes sure all ETF certificates are assigned correctly.
Q: Are ETFs only good for stocks?
No, they aren't only for stocks. Liquid assets of any type linked to a published index can turn into an ETF. ETFs exist for Commodities, Emerging Markets, Bonds, Foreign Currency, Latin Top 50, Japanese Futures, Basic Materials, Precious Metals, and a whole host of others.
Q: Do other countries also have ETFs?
Of course there are. Countries in Europe and across the Pacific Rim have funds including most developed countries. As other countries gain political and economic stability they will surely adopt ETFs.
Q: Do any ETFs try to beat the market?
Currently actively managed funds are beating the market by 2 to 3xs. Operationally, these funds are much harder to manager. When building an ETF of this type it's much easier to make sure all players are aware of where stocks are being invested. Traditionally these funds are secretive, mainly to protect themselves from parasitical resellers.
Q: Do ETFs exist for the Dow Jones Industrials or S&P 500?
Besides the S&P 500 and Dow Jones there are several funds that track those indexes. One thing people have a hard time understanding is that when trading though an ETF index the Dow Jones and S&P 500 remain in tact as their own indexes, and using a certain group license more than one fund can track an index. Start trading by opening up an account with a broker and beginning today.
Q: Could ETFs possibly be a fly-by-the-night trend or fad?
This is highly unlikely. At years end 2009 assets of exchange traded funds totaled $656.91 billion. In fact year over year during the past several years they have had steady growth with no decline. Much faster than traditional mutual funds. - 23305
In the area risk of abuse is very low. Besides, the Securities and Exchange Commission (SEC) reviews every application for the creation of a new ETF. Another helpful thing is The Depository Corporation, which makes sure stock certificates make it to the person who bought the stock also makes sure all ETF certificates are assigned correctly.
Q: Are ETFs only good for stocks?
No, they aren't only for stocks. Liquid assets of any type linked to a published index can turn into an ETF. ETFs exist for Commodities, Emerging Markets, Bonds, Foreign Currency, Latin Top 50, Japanese Futures, Basic Materials, Precious Metals, and a whole host of others.
Q: Do other countries also have ETFs?
Of course there are. Countries in Europe and across the Pacific Rim have funds including most developed countries. As other countries gain political and economic stability they will surely adopt ETFs.
Q: Do any ETFs try to beat the market?
Currently actively managed funds are beating the market by 2 to 3xs. Operationally, these funds are much harder to manager. When building an ETF of this type it's much easier to make sure all players are aware of where stocks are being invested. Traditionally these funds are secretive, mainly to protect themselves from parasitical resellers.
Q: Do ETFs exist for the Dow Jones Industrials or S&P 500?
Besides the S&P 500 and Dow Jones there are several funds that track those indexes. One thing people have a hard time understanding is that when trading though an ETF index the Dow Jones and S&P 500 remain in tact as their own indexes, and using a certain group license more than one fund can track an index. Start trading by opening up an account with a broker and beginning today.
Q: Could ETFs possibly be a fly-by-the-night trend or fad?
This is highly unlikely. At years end 2009 assets of exchange traded funds totaled $656.91 billion. In fact year over year during the past several years they have had steady growth with no decline. Much faster than traditional mutual funds. - 23305
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